(PTI) The Securities and Exchange Board of India (Sebi) has issued a consultation paper on the role and obligations of mutual fund trustees.
The consultation paper is to seek views on issues related to review of role and obligations of the trustees as well as provide clarity on the role and accountability of the boards of Asset Management Companies (AMC) to safeguard unitholders' interest, across all products and services.
Among others, Sebi has proposed enhancing the accountability of the board of an AMC by way of amendments to mutual fund regulations to make the board of AMC responsible for compliance with the regulations.
"In view of the increasing scale and reach of the Mutual Fund industry, trustees' role in respect of unitholders' protection assumes even greater significance," it said in the consultation paper.
At present, two structures are permitted for trustees under the mutual fund regulations -- corporate structure and board of trustees structure.
"It may be desirable to have a corporate form for trustees in view of perpetuity and financial independence. In this regard, it is proposed to provide a period of one year for existing trustees with a board of trustee structure to convert into a trustee company, from governance point of view and consistency in applicability of provisions," it said.
Stakeholder comments have been sought on the consultation paper till February 24.