SEBI ISSUES NEW GUIDELINES ON AMC’s ACTIVITIES
Securities and Exchange Board of India (SEBI) on 10th of August 2020 released a set of guidelines which provide administrative assistance by having a look over asset management companies. Asset management is a company which invests pooled funds from clients by taking their capital and investing it in different investments such as stocks, bonds, real estate and more.
And as per the circular issued by SEBI, only dedicated officers who have professional qualifications should be appointed as a trustee and they must have a minimum of five years of experience in finance and its related fields. Here, a trustee is a person or a firm who holds property or asset and they monitor the same for the benefit of the third party, and a trustee is appointed for various purposes especially in cases of bankruptcy, charity, for a trust fund or for certain types of retirement plans. And these officers will directly report to the employee of trustee. And their term of employment will set forth by the trustee in advance which will also include their roles and responsibilities. These appointed officers will have a perpetual arrangement with firms which are free from government intervention and this will only be for audits or to seek legal help which could be required at any given point of time. The expenses which would come from these duties will be charged under the clause of fees and expenses of the trustees under the mutual fund norms and this decision was only taken after the stakeholders vote of approval.
If at all there is any mishap by the trustees while performing their duties, they will be held liable under the discharge of the various fiduciary responsibilities which are already cast upon them.
These above-mentioned guidelines will definitely help all the trustees to monitor the activities of asset management company.
