MFs to disclose monthly asset details

Mutual fund (MF) houses are now required to make monthly disclosures about assets managed by them and to explain the rationale behind exercising their voting rights in firms, as part of stronger Securities and Exchange Board of India (Sebi) norms effective from Tuesday.

MFs will have to disclose details with respect to assets under management (AUM) from different categories of schemes, AUM from places beyond the top-15 cities, contribution of sponsors and associates in AUM, contribution from different types of investors (retail, corporate, etc), state-wise contribution and AUM from sponsor/non-sponsor group distributors.

Besides, MF players would have to disclose the specific rationale behind supporting their voting decision. MFs are required to make the disclosures on their websites and share these with the Association of Mutual Funds of India (Amfi) within seven working days from the end of the month.

MUTUAL FUNDS WILL HAVE TO DISCLOSE:

• Details with respect to assets under management (AUM) from different categories of schemes
• AUM from places beyond the top-15 cities, contribution of sponsors and associates in AUM
• Contribution from different types of investors (retail, corporate etc)
• State-wise contribution and AUM from sponsor/non-sponsor group distributors
• Specific rationale behind supporting their voting decisions
• Disclosures to be made on their websites and share these with Amfi within seven working days from the end of the month

The disclosures would also be available on Amfi website. Besides, fund houses would have to make a disclosure of votes cast on their website on a quarterly basis, within 10 working days from the end of the quarter. Further, they would make the disclosures on voting details in their annual report. The rules were recently framed by Sebi as part of its first-ever long term policy for the MF industry.

The new framework aims to enhance the reach of MF products, promoting financial inclusion and obligations of various stakeholders, among others.

According to the new norms, asset management companies would have to obtain an auditor's certification on the voting reports disclosed by them.

Among others, Sebi has asked MFs to develop a system for active support to public sector banks for distribution of the products. Fund houses would need to provide online investment facilities and tap internet and mobile phone users for direct distribution.

Currently, there are about 45 fund houses in the country, which together manage assets worth Rs 9 lakh crore. Fund mobilisation has been a tough task for them in the past few years.