Asset management company (AMC) trustees have a fiduciary duty of managing the interest of unitholders of mutual fund (MF) schemes. Trustees must ensure that there is no failure in compliance or procedures that can lead to lapses in the investment process and thereby be detrimental for investors. The recent episodes of winding-up of some MF schemes, and the alleged malpractices in MF houses such as front-running, tailgating, and kickbacks to distributors have brought into the limelight the role of trustees who are the first level regulators of the ₹38 trillion MF industry. These incidents question the responsibilities laid upon the trustees, as per market regulator Securities and Exchange Board of India (Sebi) MF Regulations of 1996, which include ensuring due diligence in operations and compliance by AMCs such that the investor interest is protected.
Insurers receptive to covering chronic ailments, declare PEDs honestly
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