The Securities and Exchange Board of India (“SEBI”) vide its circular dated August 10, 2020 (“Circular”), has decided to provide further administrative assistance to the trustees of mutual funds (“Trustees”), to help them monitor activities of the asset management companies (“AMCs”).
The Circular provides for the following:
a. Trustees shall appoint a dedicated officer having professional qualification and minimum 5 (five) years of experience in finance and financial services related field;
b. such officer shall be an employee of the Trustees and would directly report to the Trustees;
c. the scope of work for such officer shall be specified by Trustees from time to time to support the role and responsibilities of the Trustees and such officer shall accordingly assist the Trustees and discharge the activities assigned to him/ her;
d. the officer shall be treated as ‘access person’ in terms of SEBI Circular No. MFD/CIR No.4/216/2001, dated May 8, 2001;
e. any expenditure incurred for the above shall be charged as ‘fees and expenses of trustees’ under the SEBI (Mutual Funds) Regulations, 1996;
f. Trustees shall have standing arrangements with independent firms for special purpose audit and/ or to seek legal advice, whenever considered necessary.
The Circular will become applicable from October 1, 2020.
Please find a copy of the Circular here.
This update has been contributed by Aastha (Partner) and Swaraj Singh Narula (Associate).
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