August 26, 2022
admin
Sebi to tighten norms for mutual fund chiefs
The Sebi may tighten regulations for mutual funds and alternative investment funds (AIFs) in its upcoming board meeting.
The chiefs of at least three different fund houses have come under regulatory glare in the past few months. The regulator may pronounce direct action against these CEOs by debarring them from the capital market or asking that they not to be a part of the AMC set-up anymore.
The role of chief executive officers and managing directors of MFs may come under greater scrutiny. MF trustees as well as independent auditors or lawyers may be asked to review the performance of all MD-CEOs. The chiefs will have to file undertakings declaring that the investments made by the fund house are kosher and do not violate existing guidelines.
Instances related to front-running, inter-scheme transfers and investments in AT1 bonds have come to light. In all these cases, the actions of the top brass have been found wanting.
Axis MF has come under the spotlight after it sacked two employees, including its chief dealer, earlier this year, amid an internal probe. The fund house has submitted the findings of the probe to the regulator, which has been carrying on its own independent probe. The income tax department recently searched the premises linked to the dealer along with a few middlemen and some brokers over suspected tax evasion.
A whistleblower has filed a complaint against Invesco Asset Management (India), alleging irregularities in the management of its fixed income schemes. The matter has been taken up with Sebi as well as the US Securities and Exchange Commission. A case has also been filed with the Bombay High Court. Sebi is probing the matter. Sebi is also reportedly looking at Nippon Life India Asset Management’s Rs 2,500-crore investment in Yes Bank’s AT1 bonds.