Custodian independence: new conditions permit associated custodians to serve sponsor funds subject to governance and independence safeguards. An asset management company may become a proprietary trading member of a recognised stock exchange to carry out trades in the debt segment on behalf of a mutual fund. A custodian whose sponsor or its associates hold fifty per cent or more of its voting rights may act as custodian for a mutual fund of the same sponsor only if the sponsor maintains a specified net worth, a majority of custodial directors are independent of the sponsor, the custodian and the asset management company are not subsidiaries of each other, they share no directors, and both give undertakings to act independently in dealings with the scheme.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Custodian independence: new conditions permit associated custodians to serve sponsor funds subject to governance and independence safeguards.
An asset management company may become a proprietary trading member of a recognised stock exchange to carry out trades in the debt segment on behalf of a mutual fund. A custodian whose sponsor or its associates hold fifty per cent or more of its voting rights may act as custodian for a mutual fund of the same sponsor only if the sponsor maintains a specified net worth, a majority of custodial directors are independent of the sponsor, the custodian and the asset management company are not subsidiaries of each other, they share no directors, and both give undertakings to act independently in dealings with the scheme.
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