AMCs will have to comply with the new rules from April 01, 2014.
Some of the non-tax related proposals set out by SEBI in its long term policy for mutual funds will become effective from April 01, 2014. SEBI has issued a circular in which it has asked AMCs to make a number of disclosures. Other decisions taken by SEBI board like seed capital and net worth are likely to come after a gazette notification.
AUM disclosure
Currently fund houses disclose the AUM break up of T-15 and B-15 cities and the AUM of different categories of schemes like equity, balanced, debt, ETF, etc. on a quarterly basis on their websites. In addition to this, AMCs will have to disclose the AUM contributed by sponsors, contribution to AUM from investors type (retail, corporate, etc.) in different scheme types (equity, debt, ETF, etc.) and state-wise/union territory-wise contribution to AUM. This will be now a monthly disclosure.
Voting
In order to encourage AMCs to actively take part in casting voting rights on behalf of their investors SEBI had asked fund houses to disclose their general policy of voting and the actual exercise of their proxy votes in the AGMs/EGMs of the investee companies from 2010-11.
In addition to disclosing voting patterns, fund houses now have been asked to share the rationale behind casting vote for or against any matter. Further, AMCs will be required to publish summary of the votes cast across all its investee company and its break-up in terms of total number of votes cast in favor, against or abstained from. AMCs will have to disclose this data on their website on a quarterly basis.
AMCs will have to obtain a certificate from auditor on the voting reports annually. This report has to be submitted to trustees and published in the annual report and website. SEBI has asked the trustees and boards of AMCs to monitor and ensure that the votes cast by AMCs are prudent and adequate.
Go regional
In a bid to make mutual funds familiar with the masses, SEBI has asked AMCs to make available the literature on mutual funds in regional languages as a part of their investor awareness initiative. Also, the regulator has mandated AMCs to start investor awareness campaign in regional languages in print and electronic media.
Expand distribution
The regulator has nudged AMCs to sell mutual funds through the wide network of PSU banks. It has asked AMCs to facilitate online investments through their websites and also tap the burgeoning mobile-only internet users. Majority of fund houses already provide such facility to their investors.
Click here to read the circular.
