On Thursday, the Securities and Exchange Board of India (SEBI) laid a framework for the Asset Management Companies (AMCs) regarding the disclosure of investments in securities of the entities eliminated from the definition of “associate”.
SEBI has released the Circular after the amendment of the definition of “associate” in the mutual fund rules. The revised definition of the “associate” includes a person-
- who directly or indirectly, by himself or in combination with relatives, exercises control over the AMC/the trustee/the sponsors, or
- in respect of whom the AMC (or trustee or sponsor) exercises control directly or indirectly, by itself, or in the combination of other persons, or
- whose director (except an independent director)/officer/employee is AMC’s director/officer/employee.
The above definition of associate will not apply to such sponsors, which invest in various companies on behalf of the beneficiaries of the insurance policies or such other specified schemes.
The market regulator requires the AMCs to ensure scheme-wise disclosure of investments on the last day of each quarter. The disclosure must be for the investments made in securities of such entities excluded from the definition of “associate”.
Further, disclosure of investment will include ISIN-wise value of investment and value as a percentage of assets under management (AUM) of the scheme. Such disclosure should be on the websites of respective AMCs and the Association of Mutual Funds in India (AMFI) within one month from the close of each quarter.
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