TaxTMI 
TaxTMI 
Roles and responsibilities of Trustees and board of directors of Asset Management Companies (AMCs) of Mutual Funds
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....n from the Trustees. 2. At the same time, as an AMC is responsible for managing the funds of the schemes, the board of directors of the AMC is also accountable to ensure that the interests of the unitholders are protected. 3. SEBI had constituted a Working Group with a view to streamline the responsibilities at the level of the Trustees and AMCs, to deliberate and make recommendations for ensuring that Trustees can devote their attention to the fiduciary obligations and supervisory role cast upon them. Based on the recommendations of the Working Group and deliberations in the Mutual Fund Advisory Committee (MFAC), it has been decided to specify the "core" responsibilities for the Trustees of a Mutual Fund. Accordingly, amendments were carried out in MF Regulations. The amendments were notified on June 27, 2023 (link). 4. Consequent to the amendment, it has been decided as under: 4.1. Core responsibilities of the Trustees 4.1.1. As per Regulation 18(25)(C) of MF Regulations, the Trustees shall exercise due diligence on such matters as may be specified by the SEBI from time to time. In terms of the said Regulation 18 (25)(C), the Trustees shall exercise independent due....
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....ature and adequacy of the alerts and the manner of dealing with such alerts by AMCs. 4.1.7. The Trustees shall require the AMCs to furnish, in a true and fair manner, reports and alerts based on pre-decided parameters including but not limited to the areas specified as core responsibilities at para 4.1.1 above, for taking appropriate action. 4.1.8. The Trustees shall periodically review the steps taken by AMCs for folios which do not contain all the Know Your Client (KYC) attributes / updated KYC attributes and ensure that the AMCs take remedial steps necessary for updating the KYC attributes especially pertaining to bank details, PAN, mobile phone number. 4.2. Third Party Assurances In order to enable Trustees to focus on the core responsibilities, for responsibilities other than the core responsibilities mentioned at para 4.1, the Trustees may rely on professional firms such as Audit Firms, Legal Firms, Merchant Bankers, etc (collectively referred to as "third party fiduciaries") for carrying out due diligence on behalf of the Trustees. 4.2.1. The responsibilities other than core responsibilities, for which the Trustees may avail services of third party fiduciaries....
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....pany is appointed as the Trustee of a Mutual Fund, the Chairperson of the board of directors of that Trustee company shall be an independent director. Further, a Trustee company, which has already been appointed as the Trustee of a Mutual Fund shall comply with this requirement within a period as may be specified by SEBI from time to time. 4.4.2. Accordingly, it is decided that the Trustee company, which has already been appointed as the Trustee of a Mutual Fund, shall ensure compliance with the requirement of appointment of independent director as Chairperson of the board of directors of Trustee company, within a period of six months from the date of this circular coming into force. 4.5. Meetings between the Trustee Company and the AMC 4.5.1. As per Regulation 25A of MF Regulations, the board of directors of the Trustee company and the board of directors of the AMC, including any of their committees, shall meet at such frequency as may be specified by SEBI from time to time. 4.5.2. Accordingly, the board of directors of the AMCs and the board of directors of the Trustee Company shall meet at least once a year to discuss the issues concerning the Mutual Fund, if any, an....
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.... b) Review of complaints / grievances handling mechanism including reported in-stances of mis-selling and frauds, if any. Analyse the root cause of investor complaints, identify market conduct, issues and advise the management appro-priately about rectifying systemic issues, if any. c) Review measures and steps taken to reduce unit holder complaints 4.2 Investor education and awareness a) Recommendation of policy on utilisation of investor education and awareness funds b) Review of various investor education and awareness steps taken by the AMC in-cluding effective utilisation of investor education and awareness funds on period-ic basis 4.3 Regulatory and other functions a) Ensure that the AMC adopts a standard operating procedure for its processes including timeframe for processing and confirmation of financial and non-financial transactions, treats unit holders fairly and equally and there is no preferential treatment given to different classes of investors. b) Ensure compliances with applicable laws with respect to resolving, reporting and disclosures of complaints and grievances c) Review of unclaimed amounts ....