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TMI BlogAsset management company and its obligationsX X X X Extracts X X X X X X X X Extracts X X X X ..... ith these regulations. (5) The trustees at the request of the asset management company may terminate the assignment of the asset management company at any time: Provided that such termination shall become effective only after the trustees have accepted the termination of assignment and communicated their decision in writing to the asset management company. (6) Notwithstanding anything contained in any contract or agreement or termination, the asset management company or its directors or other officers shall not be absolved of liability to the mutual fund for their acts of commission or omission, while holding such position or office. 2[(6A) 13[(a)] The Chief Executive Officer (12[whatever be the designation]) of the asset management company shall ensure that the mutual fund complies with all the provisions of these regulations and the guidelines or circulars issued in relation thereto from time to time and that the investments made by the fund managers are in the interest of the unit holders and shall also be responsible for the overall risk management function of the mutual fund. 14[(b) Chief Executive Officer (whatever be the designation) shall also ensure that the Asset Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the mutual fund : Provided further that the aforesaid limit of 5 per cent shall apply for a block of any three months. (b) An asset management company shall not purchase or sell securities through any broker [other than a broker referred to in clause (a) of sub-regulation (7)] which is average of 5 per cent or more of the aggregate purchases and sale of securities made by the mutual fund in all its schemes, unless the asset management company has recorded in writing the justification for exceeding the limit of 5 per cent and reports of all such investments are sent to the trustees on a quarterly basis : Provided that the aforesaid limit shall apply for a block of three months.] (8) An asset management company shall not utilise the services of the sponsor or any of its associates, employees or their relatives, for the purpose of any securities transaction and distribution and sale of securities: Provided that an asset management company may utilise such services if disclosure to that effect is made to the unitholders and the brokerage or commission paid is also disclosed in the half-yearly annual accounts of the mutual fund: 4[Provided further that the mutual funds shall d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in violation of securities laws. (15) The asset management company shall appoint registrars and share transfer agents who are registered with the Board: Provided if the work relating to the transfer of units is processed in-house, the charges at competitive market rates may be debited to the scheme and for rates higher than the competitive market rates, prior approval of the trustees shall be obtained and reasons for charging higher rates shall be disclosed in the annual accounts. (16) The asset management company shall abide by the Code of Conduct as specified in 19[PART-A of] the Fifth Schedule. 22[(16A) The asset management company shall invest such amounts in such schemes of the mutual fund, based on the risks associated with the schemes, as may be specified by the Board from time to time.] 28[(16B) The asset management company shall invest a percentage of the remuneration of such employees as specified by the Board in units of mutual fund schemes based on the designation or roles of the designated employees in the manner as may be specified by the Board.] 10[(17) The asset management company shall not invest in any of its scheme, unless full disclosure of its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified norms for empanelment of brokers and marketing agents; (viii) obtained, wherever required under these regulations, prior in principle approval from the recognized stock exchange(s) where units are proposed to be listed. (b) The board of directors of the asset management company shall ensure that - (i) the asset management company has been diligent in empanelling the brokers, in monitoring securities transactions with brokers and avoiding undue concentration of business with specific brokers; (ii) the asset management company has not given any undue or unfair advantage to any associate or dealt with any of the associate of the asset management company in any manner detrimental to interest of the unit holders; (iii) the transactions entered into by the asset management company are in accordance with these regulations and the respective schemes; (iv) the transactions of the mutual fund are in accordance with the provisions of the trust deed; (v) the networth of the asset management company are reviewed on a quarterly basis to ensure compliance with the threshold provided in clause (f) of sub-regulation (1) of regulation 21 on a continuous basis; (vi) all service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (28) The Chief Executive Officer or Managing Director or such other person of equivalent or analogous rank and Chief Compliance Officer of the asset management company shall be responsible and accountable for implementation of such an institutional mechanism for deterrence of potential market abuse, including front-running and fraudulent transactions in securities. (29) The asset management company shall establish, implement and maintain a documented whistle blower policy that shall - (a) provide for a confidential channel for employees, directors, trustees, and other stakeholders to raise concerns about suspected fraudulent, unfair or unethical practices, violations of regulatory or legal requirements or governance vulnerability, and (b) establish procedures to ensure adequate protection of the whistle blowers.] 27[(30) An asset management company shall ensure compliance with the Investor Charter specified by the Board from time to time.] 29[(31) The asset management company shall conduct stress testing for such schemes as specified by the Board and disclose the results of the stress testing in the form and manner, as may be specified by the Board.] **** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the Official Gazette, that is 04-02-2021 before it was read as ":" 21. Omitted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as "Provided that the asset management company having any of its operations outside India shall wind up and bring them within the territory of India within a period of one year form the date of notification of Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2011: Provided further that the Board may grant a further period of one year if it is satisfied that there was sufficient cause for not winding up of the operation outside India within that period." 22. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/36 dated 05-08-2021 23. Omitted vide Notification No. SEBI/LAD-NRO/GN/2023/134 dated 26-06-2023 w.e.f. 01-01-2024 before it was read as, "Explanation.-For the purpose of this sub-regulation, the words "these regulations" shall mean and include the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended from time to time." 24. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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