The Securities and Exchange Board of India (SEBI) on July 07, 2023, issued a notification regarding the Roles and responsibilities of Trustees and Board of Directors of Asset Management Companies (AMCs) of Mutual Funds.
The following has been stated namely: -
• The Core responsibilities of the Trustees:
1. The Trustees shall exercise independent due diligence on certain “core responsibilities”, which are specified as under:
a. Ensure the fairness of the fees and expenses charged by the AMCs
b. Ensure that undue or unfair advantage is not given by AMCs to any of their associates/group entities.
2. Periodic reviewing of the steps taken by AMCs for folios that do not contain all the KYC attributes/updated KYC attributes and have to ensure that the AMCs take remedial steps necessary for updating the KYC attributes especially pertaining to bank details, PAN, mobile phone number.
• Third Party Assurance:
1. In order to enable Trustees to focus on the core responsibilities, professional firms such as Audit Firms, Legal Firms, Merchant Bankers, etc (collectively referred to as “third party fiduciaries”) are relied on for carrying out due diligence on behalf of the Trustee.
2. The responsibilities other than core responsibilities include:
a. Overseeing that AMCs manage the operations of Mutual Fund schemes independently from other activities.
b. Discharging their role as a custodian of assets on behalf of unitholders in accordance with MF Regulations and the trust deed.
• Meetings between the Trustee Company and the AMC
1. The board of directors of the Trustee company and the board of directors of the AMC, including any of their committees, shall meet at such frequency as may be specified by SEBI from time to time.
This shall come into force on January 01, 2024.
[Notification No. SEBI/H0/IMD/IMD-poD-1/P/CIR/2023/117]
