Sebi disclosure norms for mutual funds effective from today

Mutual fund houses now require to make monthly disclosures about assets managed by them as well as explain the rationale behind exercising their voting rights in firms, as part of stronger Sebi norms effective from today.

Mutual funds will have to disclose details with respect to Asset Under Management from different categories of schemes, AUM from places beyond top-15 cities, contribution of sponsor and its associates in AUM, contribution from different types of investors (retail, corporate etc), state-wise contribution and AUM from sponsor/non-sponsor group distributors.

Besides, the mutual fund players would now have to disclose the specific rationale behind supporting their voting decision.

The MFs are required to make the disclosures on their websites and share the same with Association of Mutual Funds of India (AMFI) within 7 working days from end of the month. The disclosures would also be available on AMFI website.

Besides, the fund houses would have to make disclosure of votes cast on their website on a quarterly basis, within 10 working days from the end of the quarter. Further, they would make the disclosures on voting details in their annual report.

The rules were recently framed by the Securities and Exchange Board of India (Sebi) as part of its first-ever long term policy for the mutual fund industry.

The new framework relates to enhancing the reach of mutual fund products, promoting financial inclusion, obligation of various stakeholders, among others.

As per the new norms, Asset Management Companies (AMCs) would have to obtain auditor's certification on the voting reports being disclosed by them.

Among others, Sebi has asked the mutual fund to develop a system for active support to PSU banks for distribution of the products and the fund houses would need to provide online investment facility and tap the internet and mobile phone users for direct distribution of products.

Currently, there are about 45 fund houses in the country, which together manage assets worth over Rs 9 lakh crore but fund mobilisation has been a tough task for them in the past few years.

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