SEBI to set a cut off time for accepting applications for SRO.
SEBI, in its board meeting held today, decided to have a single SRO for MF distributors. The SEBI board also decided to have a cut off time for accepting applications for being recognized as SRO.
It is believed that AMFI will become the SRO for mutual fund distributors. AMFI had also invited applications for a CEO to oversee the SRO.
Membership of debt segment of stock exchanges
Further, the regulator also permitted AMCs to take membership of debt segment of stock exchanges under 'Proprietary Trading Member' (PTM) category to undertake trades directly on behalf of such schemes managed by them.
Appointment of custodian belonging to the same group
The regulator also decided that the custodian in which the sponsor of a mutual fund or its associates are holding 50 percent or more of the voting rights of the share capital of the custodian would be allowed to act as custodian subject to fulfilling the following conditions i.e. (a) the sponsor should have net worth of atleast Rs 20000 crore at all points of time, (b) 50 per cent or more of the directors of the custodian shall be those who do not represent the interests of the sponsor or its associates, (c) neither the custodian nor the asset management company of a mutual fund shall be a subsidiary of each other, (d) no person shall be a director of both the custodian and the asset management company of a mutual fund and (e) the custodian and the asset management company of a mutual fund shall sign an undertaking that they will act independently of each other in their dealings with the schemes.
Presently, mutual funds are not allowed to appoint a custodian belonging to the same group, if the sponsor of the mutual fund or its associates hold 50 per cent or more of the voting rights of the share capital of such a custodian or where 50 per cent or more of the directors of the custodian represent the interests of the sponsor or its associates.
