The Securities and Exchange Board of India (SEBI) has introduced new regulations for Asset Management Companies (AMCs) aimed at improving transparency and accountability. Starting November 1, AMCs will be required to publicly disclose the investment holdings of key individuals, trustees, and their close relatives every three months.
Starting November 1, 2024, the Securities and Exchange Board of India (SEBI) will implement new rules that require Asset Management Companies (AMCs) to publicly disclose the financial holdings of key individuals, trustees, and their close relatives every three months. This initiative aims to improve transparency and accountability in the asset management sector.
Additionally, mutual fund (MF) units will be subject to the Prohibition of Insider Trading (PIT) Regulations, effective from the same date. This follows a notification issued in November 2022, which is now being enacted after discussions with industry representatives.
SEBI has mandated that AMCs disclose the holdings of designated persons, trustees, and their immediate relatives on a quarterly basis. They must report any transactions over Rs 15 lakh involving their own mutual fund units to the compliance officer within two business days.
To enhance the regulation of insider trading related to mutual fund units, SEBI’s notification from November 2022 will be enforced starting November 1, 2024. A working group, including members from AMCs, AMFI, stock exchanges, and depositories, provided recommendations for implementing these changes.
AMCs are required to disclose the total holdings of designated persons and trustees on a quarterly basis, starting with the holdings as of October 31, 2024, which must be reported on the stock exchanges by November 15, 2024. For subsequent quarters, disclosures must be made within 10 days after the end of each quarter.
If designated persons or trustees conduct transactions in mutual fund units that exceed Rs 15 lakh in a quarter, they must inform their compliance officer within two days of the transaction.
Moreover, SEBI has revised guidelines regarding investment restrictions for AMC employees and trustees. The previous guidelines will no longer apply to investments and redemptions in mutual fund units, which will now strictly adhere to the amended PIT Regulations.
A new clause has been added to the guidelines, specifying that these rules apply to transactions involving units of mutual fund schemes where the concerned persons are employed. Employees must also avoid profiting from buying and selling securities within 30 days of their own transactions. If they do, they must explain this to the compliance officer, who will report it to the AMC board and trustees.
The new circular will take effect on November 1, 2024, and aims to protect investor interests and regulate the securities market effectively.
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