SEBI (Securities and Exchange Board of India) has indicated that it is carefully monitoring all the verdicts and practices of the mutual fund industry, through its letter dated July 9, 2018, sent to AMFI and Asset Management Companies.
The Securities and Exchange Board of India has sent a letter dated July 9, 2018, to the chief executive officers of AMCs against 25 violations by the 42-player MF industry.
The market Regulator has also sent the letter dated July 9, 2018, to the AMFI (Association of Mutual Funds in India).
In its letter to the AMFI and Asset Management Companies, the Securities and Exchange Board of India has specified that it strictly observing all the decisions and practices of the MF industry.
The Securities and Exchange Board of India has also stated in the letter that it has advised the members of the Association of Mutual Funds in India to take remedial actions with respect to the observations it has listed.
Additionally, SEBI may advise the members of AMFI to “ensure strict compliance” with the Market Regulator’s Mutual Funds Regulations 1996 and all the Market Regulator’s circulars issued now and then.
“Any repetition of the violations or non-compliance with provisions of aforesaid Regulations and Circulars would be viewed seriously,” the Market Regulator’s letter stated.
The Market Regulator has prepared a list of 25 violations after a thorough examination of MFs from April 2014 to March 2016.
The recent violations by HDFC MF and ICICI Prudential MF were the main reason behind the Securities and Exchange Board of India’s strict observations of the decisions and practices of the MF industry.
The Market Regulator has already warned ICICI Prudential MF for investments in the ICICI Securities IPO, and HDFC Mutual Fund over allotting shares to distributors ahead of its IPO.
The Mutual Fund Industry players said that SEBI has become watchful and severe action will be taken against those who disobey the norms, reported Money Control.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]