SEBI has issued the disclosure framework for asset management companies, mandating a scheme-wise disclosure of investments in securities of entities that are excluded from the definition of ‘associate’.
This happened after SEBI amended mutual fund rules earlier this month to eliminate the definition of ‘associate’ from sponsors who invest in diverse companies on behalf of the beneficiaries of insurance plans or other schemes.
According to the rules, an associate is someone who, directly or indirectly, by himself or in collaboration with relatives, exercises control over the AMC or the trustee, among other things. As part of the new framework, asset management companies (AMCs) will be required to make scheme-wise disclosures of investments in securities of such entities that are not defined as ‘associate’ as of the last day of each quarter, according to a circular issued by the Securities and Exchange Board of India.
Furthermore, investment disclosure shall include the ISIN wise value of the investment as well as the value as a percentage of the scheme’s assets under management (AUM).
Within one month after the end of each quarter, such disclosure would be provided on the websites of the respective AMCs as well as the website of the Association of Mutual Funds in India (AMFI). There are currently 43 mutual fund houses that manage assets worth over Rs 38 lakh crore.
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