Securities Board of India (SEBI) in three separate orders has said that three major financial institutions have violated the provision of Mutual Fund norms. Securities Exchange Board of India (SEBI) which is the market regulator has imposed a penalty of Rs 10Lakh each on SBI, LIC and Bank of Baroda for not following with mutual fund norms. SEBI noticed that these three public financial institutions are the sponsors of SBI Mutual Fund they are SBI Mutual fund, LIC Mutual Fund and Bank of Baroda Mutual Fund and these financial Institutions hold more than 10% each in these Mutual Funds. Further it was noticed that these mutual fund cooperation’s hold more than ten percent of the stakes individually in the asset management company and also the trustee company in the SEBI.
Now it has come into light that these three cooperation’s are not complying with the rules set forth in the mutual fund rules in 2018 by the SEBI which stated that a mutual fund institution must not have more than ten percent of stake in AMC (Asset Management Company)and trustee company of Unit trust of India (UTI-MF) and it was also given time till march 2019 to follow up with the new rules which came up with refreshing requirements, but now even after a whole year was given, these three cooperation did not adhere to the given rules.
SEBI has pointed out recently that this three cooperation did not deny the fact that they have not cohered to the rules. And in the circumstance of not following the rules, SEBI had exclusively specified them a penalty of ten lakhs rupees each and it has also stated that it may launch a series of action against these entities for non- conformance of the rules provided for the mutual fund form by SEBI.
