SEBI allows PE funds to become mutual fund sponsors
The capital market regulator SEBI Asset management companies to become self-care In the event that the current sponsors wish to separate themselves from the business.
To become a self-sponsored AMC, SEBI said in Friday’s bulletin, it must have been in the financial services industry for more than five years and have a positive net worth in all of the immediately preceding five years.
She said the sponsor, who is proposing the disengagement, had to have been associated with the mutual fund for at least five years.
The regulator also allowed PE funds to become sponsors of mutual funds.
The publication said that given the development of the mutual fund industry and the significant shift in the nature of roles and responsibilities assigned to asset management centers in the past few decades, most money management companies are well prepared to stand on their own and create trust among their investors. .
She said that in light of the above, it was decided to allow the sponsor to voluntarily reduce its stake in AMC.
A self-supported AMC must have recorded a profit in each of the five immediately preceding years with an average annual net profit of at least Rs 10 crore.
Any sponsor proposing to disengage may undertake to reduce the shareholding percentage to less than 10 percent in five years in the case of listed AMCs and within three years in the case of unlisted AMCs.
After the breakup, the maximum shareholding of any financial investor must be less than 10 percent.
PE Companies must have at least five years of experience And he must have managed committed and drawn up share capital of more than Rs. 5,000 crore. PE funds must have an initial contribution from the sponsor equal to the share capital of AMC to the extent of over ₹ 150 crore which will be locked for a period of five years.
The role of trust
The Trustees shall exercise independent due diligence to ensure the fairness of fees and expenses charged by AMC and will review AMC’s performance in its schemes against that of their peers or appropriate standards.
Trustees must also ensure that AMCs have put in place appropriate systems to prevent missales to increase the assets under management and valuation of AMCs, the SEBI said.
Trustees can rely on audit firms, law firms and commercial bankers to do their due diligence, the regulator said.
SEBI said in a publication that the new framework for trustees will come into effect from next January.