TaxTMI 
TaxTMI 
TaxTMI 
Roles and responsibilities of Trustees and board of directors of Asset Management Companies (AMCs) of Mutual Funds
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....y them act in the best interests of the unitholders. Accordingly, any conflict between interests of unitholder and that of AMCs' stakeholders needs to be addressed by the Trustees. While the SEBI (Mutual Funds) Regulations 1996 ('MF Regulations') provide for restrictions to address certain scenarios of conflict of interest, there are other areas of conflict which require specific attention 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 delib....
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....r advantage is not given by AMCs to any of their associates/group entities. f) The Trustees shall be responsible to address conflicts of interest, if any, between the shareholders/stakeholders/associates of the AMCs and unitholders. g) The Trustees shall ensure that the AMC has put in place adequate systems to prevent misconduct including market abuse/misuse of information by the employees, AMC and connected entities of the AMCs. 4.1.2. The Trustees shall take steps to ensure that there are system level checks in place at AMCs' end to prevent fraudulent transactions including front running by employees, form splitting/ mis-selling by distributors etc. The Trustees shall review such checks periodically. 4.1.3. The Trustees and their re....
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....ting 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, include the following: a) Overseeing that AMCs manage the operations of Mutual Fund schemes independently from other activities. b) ....
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....e board of directors of AMC along with recommendations for action. 4.3.5. The UHPC shall make recommendations relating to protection of interest of investors as well as monitor its implementation. 4.3.6. The detailed guidelines regarding UHPC are specified at Annexure-1 to this circular. AMC shall ensure that UHPC is constituted and operates in compliance with the said guidelines. 4.3.7. In addition to the above functions and responsibilities, the board of directors of AMCs, from time to time may also assign such other responsibilities to the UHPC, as deemed fit. 4.4. Appointment of the Trustee Company 4.4.1. As per Regulation 16 (7) of MF Regulations, in case a company is appointed as the Trustee of a Mutual Fund, the Chairperson of t....
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....arket. 7. This circular is available at www.sebi.gov.in under the link "Legal →Circulars". Yours faithfully, Peter Mardi Deputy General Manager +91-22-26449233 [email protected] Annexure - 1 1. Membership / constitution: a) The Chairperson of the Committee shall be an independent director. b) The UHPC of AMC shall have minimum three directors as members. c) At least two-third members of the UHPC shall be independent directors of AMC. If two-third of the total strength results into fraction, then higher number after rounding up shall be considered. d) The members of the UHPC will be appointed by the board of directors of AMC. e) The UHPC shall invite expert / representative of unit holders as an invitee for matters as....
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....nit 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....