scorecardresearchMutual fund houses to set up Unit Holder Protection Committee to protect

Mutual fund houses to set up Unit Holder Protection Committee to protect investors' interest. Details here

Updated: 11 Jul 2023, 09:31 AM IST
TL;DR.

The UHPC will ensure adoption of sound and healthy market practices in terms of investments, sales, marketing, advertising, management of conflict of interests, redressal of unit holder's grievances and investor awareness.

Mutual fund houses to set up Unit Holder Protection Committee. Details here.

Mutual fund houses to set up Unit Holder Protection Committee. Details here.

While taking yet another step to protect the interest of investors, capital markets regulator Securities Exchange Board of India (Sebi) recently released a circular asking the fund houses to set up a unit holder protection committee (UHPC).

The directions were issued via a circular detailing roles and responsibilities of asset management companies.

The regulator has spelt out the need to set up these committees. The circular says that each AMC is required to constitute a UHPC in the form and manner and with a mandate as may be specified by Sebi.

Committee’s functions

Essentially, the committee will be responsible for protection of interest of unit holders of mutual fund schemes vis-a-vis all products and services provided by the AMC, reads the Sebi's directive.

The UHPC will also ensure adoption of sound and healthy market practices in terms of investments, sales, marketing, advertising, management of conflict of interests, redressal of unit holder's grievances and investor awareness.

Besides these, UHPC will ensure compliance with laws and regulations and other related processes with specific reference to the operation of the mutual fund houses.

The circular, signed by deputy general manager Peter Mardi, will come into effect from January 1, 2024.

The circular states that the protection committee will have the following mandates:

1. First and foremost to review the various compliance issues relating to protection of the interests of the unit holders.

2. The committee will also need to keep the unit holders well informed of and educated about mutual fund products, investor charter and complaint handling procedures.

The committee will report its findings to the board of directors of AMC along with recommendations for action.

The circular further states that the UHPC will make recommendations relating to protection of interest of investors as well as monitor its implementation.

 

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First Published: 11 Jul 2023, 09:31 AM IST