SEBI has imposed a total penalty of Rs 5 lakh on ICICI Prudential Trust and ICICI Prudential AMC for violating various MF regulations.
On December 23, the market regulator published an adjudication order that noted three violations by ICICI Prudential Trust and ICICI Prudential AMC. SEBI found these three violations while inspecting various documents and affairs of ICICI Prudential MF, ICICI Prudential Trust and ICICI Prudential AMC for the period April 01, 2014 to March 31, 2016.
First, ICICI Prudential FMCG Fund did not comply with the disclosed investment objectives in its Scheme Information Document (SID). Objective of the scheme was to generate capital appreciation through investments made primarily in equities of fast moving consumer goods (FMCG) sector companies. However, the scheme had invested in companies other than those in the FMCG industry.
Second, ICICI MF’s various schemes have mentioned in their SID that if any debt instrument they hold falls below credit rating A, the portfolio will be rebalanced within 30 days from the date of deviation. However, subsequent to downgrading of rating of JSPL’s two NCDs, ICICI MF did not rebalance the portfolio in accordance with the conditions mentioned in the SIDs of its various schemes.
Third, ICICI Prudential Trust delegated its responsibility of declaring dividend to the AMC. “If the timing of declaration of dividend as well as quantum of dividend are decided by another entity i.e. the AMC, it will compromise the regulatory framework prescribed in this regard,” SEBI noted.
ICICI Prudential AMC and Trust have to pay the said total amount of penalty within 45 days of receiving this order.
