Such a transaction will be executed only after a written acknowledgment is received from the investors to that effect. SEBI also announced more measures to regulate mutual fund distributors introducing the concept of 'fit and proper person' in the due diligence process to be conducted by Asset Management Companies (AMC) before empanelling distributors.
SEBI said these regulations will be applicable for those distributors who have presence in more than 20 locations and have raised an asset under management (AUM) of Rs. 100 crore across the industry from retail and high net worth investors.
In pursuance to its board meeting held on July 28, 2011, Sebi also notified the introduction of transaction charges and additional disclosure requirements for the mutual fund industry. According to the Sebi circular, fund houses are required to disclose the track record of fund managers and its various schemes.
When the performance of a particular mutual fund scheme is being advertised, the regulator has asked fund houses to also include the performance data of all the other schemes managed by the respective fund manager in the advertisement. "In case the number of schemes managed by a fund manager is more than six, then the AMC may disclose the total number of schemes managed by that fund manager along with the performance data of top 3 and bottom 3 schemes," SEBI said in its circular.
In order to provide ease of understanding to retail investors, fund houses are required to disclose 'point to point returns on a standard investment of Rs. 10,000 in the advertisement.
Source: FE
