May 25, 2017
Securities and Exchange Board of India - Circulars on mutual funds
SEBI has recently issued circulars on mutual funds, online registration mechanism for securities market intermediaries and Instant Access Facility and Use of e-wallet for investment in Mutual Funds.
Vide its circular on mutual funds, SEBI has modified the earlier circular dated 18 March, 2017, issued by it on mutual funds. In order to ensure investor protection and transparency in operations of Mutual Funds/ Asset Management Companies, SEBI has now notified that with the underlying objective to promote transparency in remuneration policies so that executive remuneration is aligned with the interest of investors, Mutual Funds/Asset Management Companies shall make the following disclosures pertaining to a financial year on the website of the said Mutual Funds/Asset Management Company under a separate head – "Remuneration":
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Name, designation and remuneration of Chief Executive Officer, Chief Investment Officer and Chief Operations Officer or their corresponding equivalent by whatever name called;
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Name, designation and remuneration received by top ten employees in terms of remuneration drawn for that financial year;
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Name, designation and remuneration of every employee whose:
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Annual remuneration was equal to or above one crore and two lakh rupees for that financial year.
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Monthly remuneration in the aggregate was not less than eight lakh and fifty thousand rupees per month, if the employee is employed for a part of that financial year;
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The ratio of CEO's remuneration to median remuneration of other employees; and
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Mutual Fund's total AAUM, debt AAUM and equity AAUM and rate of growth over last three years.
For the aforesaid disclosure purpose, remuneration shall mean remuneration as defined in section 2(78) of the Companies Act, 2013.The said information shall be disclosed within one month from the end of the respective financial year and the same is effective from Financial Year 2016-17.
SEBI has recently operationalized online registration of intermediaries. Intermediaries which can file online application for registration include stock brokers, sub-brokers, merchant bankers, underwriters, registrar to an issue & share transfer agents, debenture trustees, bankers to an issue and credit rating agency. All the aforesaid intermediaries can now file applications for registration at https://siportal.sebi.gov.in. The said portal will also be operational for the depository participants from May 31, 2017.
SEBI has further allowed investors to invest in mutual funds through their e-wallets. The same is subject to certain conditions, one of them being that an investor's subscription to a mutual fund through an e-wallet is restricted to INR 50,000/-per financial year. Also, to enhance the reach of Mutual Funds towards the retail investors, SEBI has been decided to issue guidelines for extending Instant Access Facility. Instant Access Facility facilitates credit of redemption proceeds in the bank account of the investor on the same day of redemption request. Mutual funds may now offer Instant access facility to the investors subject to certain conditions.
All the said circulars are attached herewith as below for your reference.
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For any details and clarifications, please feel free to write to:
