Market regulator SEBI has formed two separate working groups to streamline the role of mutual fund trustees. While a group of the committee will review the role and eligibility of a sponsor of a mutual fund to facilitate growth and innovation, the other group will look into streamlining the role and obligations of trustees.
A sponsor establishes a mutual fund, along with any individual or body corporate, while the main role of a trustee is to ensure that the interest of the unit holders is protected.
A Balasubramanian, MD and CEO of Aditya Birla Sun Life AMC and Chairman of AMFI will lead the working group on reviewing the role and eligibility of an MF’s sponsor, while the other group will be headed by Manoj Vaish, Independent Trustee of Mirae Mutual Fund.
To usher in competition
“Considering the changing dynamics of the mutual fund industry, a need has been felt that in addition to the existing eligibility requirements to sponsor a mutual fund, an alternative set of eligibility requirements may be introduced to enable new players, who otherwise may not have been eligible, to act as sponsor,” SEBI said in a statement.
This is expected to not only foster competition in the mutual fund industry but also facilitate consolidation in the industry through mergers and acquisitions so as to reap economies of scale and scope. Also, it is expected to facilitate fresh flow of capital into the industry and to foster innovation, it added.
Apart from Balasubramanian, other members of the group include J Ranganayakulu, ex-Executive Director, Sebi and consultant at Cyril Amarchand Mangaldas; Nilesh Vikamsey, Khimji Kunverji & Co LLP Chartered Accountants; D P Singh, Chief Business Officer at SBI Funds Management and Alok Mundra, Partner at EY India.
Framework for panel
The working group constituted under Vaish will suggest a framework so as to ensure that trustees can devote attention to the fiduciary obligations and supervisory role cast upon them, rather than being burdened with operational responsibilities.
Apart from Vaish, other members of the group are Sunil Gulati, Independent Trustee, SBI Mutual Fund; Ramamoorthy Rajagopal, Chief Operating Officer, DSP Mutual Fund; Supriya Sapre, Chief Compliance Officer, HDFC Mutual Fund and Padmaja Shirke, Compliance Officer, Union Mutual Fund.