In a bid to make mutual funds more accountable, SEBI has decided to introduce a Code of Conduct for fund managers including chief investment officers and dealers of AMCs. The CEO of a fund house will be responsible for ensuring that the Code of Conduct is followed by all such officers, SEBI said in a press release.
Currently, the MF regulations provide for AMCs and Trustees to follow a Code of Conduct. Also, under current MF Regulations, CEO is entrusted with several responsibilities.
"The Board after deliberation, approved the amendment of MF Regulations to introduce a Code of Conduct for Fund Managers including Chief Investment Officers and Dealers of AMCs.
Further, the Chief Executive Officer will be responsible to ensure that the Code of Conduct is followed by all such officers," SEBI said in a release.
The move comes after SEBI showing its displeasure with the conduct of fund houses on a few occasions in the past on issues such as not sticking to the mandate of schemes, fund managers entering into agreements with borrowers and failure to ensure adequate risk-management mechanisms.
SEBI has also allowed fund houses to become self-clearing members of the recognised Clearing Corporations to clear and settle trades in the debt segment of recognised stock exchanges, on behalf of its mutual fund schemes.
Currently, fund houses place orders as investors. Then the order goes through a broker and then through a clearing member.
