HDFC MF-Morgan Stanley deal gets Competition Comm green signal

Competition Commission has approved HDFC entities' acquisition of eight mutual fund schemes run by Morgan Stanley, saying the deal does not raise anti-competitive concerns.
Under the deal, announced in December last, HDFC Trustee Company and HDFC Asset Management Company would acquire Morgan Stanley's eight schemes with assets worth Rs 3,290 crore.
Clearing the proposed combination, Competition Commission of India (CCI), in an order dated January 30 but released today, said it is "not likely to have appreciable adverse effect on competition in India".
The notice seeking approval for the deal was submitted on January 17 by HDFC Trustee and HDFC Asset Management Company (AMC).

MS Mutual Fund is sponsored by Morgan Stanley. MS AMC is the asset management company of MS Mutual Fund.
According to the order, there appears to be ample choice for customers in selecting a mutual fund. There also seems to be no significant barriers for the customers to switch from one mutual fund to another without incurring any significant cost, it added.

Quoting the quarterly report of the Association of Mutual Funds of India (AMFI), the order said the total size of the market in terms of the average asset under management (AAUM) for all schemes stood at Rs 8,76,546 crore in 2013 December quarter.

"It is observed from the report that the share of the MS Mutual Fund schemes in the total AAUM for the latest quarter was insignificant," CCI said.
As per the Scheme Transfer Agreement, eight mutual fund schemes of Morgan Stanley Mutual Fund including the assets, liabilities, unclaimed dividends, corpus along with trusteeship and management of these schemes, would be transferred to the acquirers.
The agreement was between HDFC Trustee, HDFC AMC, the board of trustees of Morgan Stanley Mutual Fund and Morgan Stanley Investment Management Pvt Ltd.