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In a consultation papers which aims to review roles and responsibilities of mutual fund trustees, SEBI has proposed that the AMC board should constitute a ‘Unit Holder Protection Committee’ (UHPC).
The committee will have an independent review mechanism that will look at decision of AMCs from unitholders’ interests.
Also, the committee will protect interest of mutual fund investors, redress their grievances and spread awareness and education.
In another proposal, the market regulator has asked fund houses to make all their public disclosures like notice and addendum available at a common platform. SEBI said, “Having a common platform would be useful and would serve as a one stop place for such information for investors who invest with multiple mutual funds. Hence, there should be a common platform where all public announcements of such as notices and addenda issued across all mutual funds are available for investors.”
Here are other key proposals:
- Trustees can rely on third party assurances on review of policy of empanelment of distributors by AMCs, review of networth requirements, transaction of MFs with respect to trust deeds and so on
- Board should monitor securities transactions with brokers and avoid undue concentration of business with any broker. They should also monitor if AMCs is giving undue advantage to any associates
- AMC board should report alerts in true and fair manner to trustees
You can share your feedback to SEBI latest by February 24 by email at peterm@sebi.gov.in or mutualfundtrustees_public_comments@sebi.gov.in.
