Mutual Fund AMCs Required to Form Audit Committees for Enhanced Oversight; Effective August 1, 2022.

The circular mandates that Asset Management Companies (AMCs) of mutual funds establish an Audit Committee to enhance oversight of financial reporting, audit processes, internal controls, and regulatory compliance. The committee must have at least three directors, with two-thirds being independent. It is responsible for reviewing financial reporting, internal and statutory audits, and ensuring compliance with laws. The committee must meet at least four times a year, with specific quorum requirements. It must also interact with auditors and the trustees' audit committee annually. These guidelines, effective from August 1, 2022, complement existing legal and regulatory obligations.