Market regulator SEBI has clarified that the responsibility of distributors due diligence rests solely with AMCs. It has asked AMCs not to delegate this responsibility to any agency.
“It is hereby clarified that the due diligence of distributors is solely the responsibility of mutual funds/AMCs. This responsibility shall not be delegated to any agency. However, mutual funds/AMCs may take assistance of an agency of repute while carrying out due diligence process of distributors,” states the circular issued by SEBI.
“That means AMCs can still take help of external auditors to conduct due diligence but the final responsibility rests with AMCs,” says a sales head of a leading fund house.
Cafemutual had earlier reported that AMFI is in the final stage of appointing audit agencies for distributor due diligence. Read here: 11 audit firms show interest in big distributors’ due diligence
