Sebi imposes Rs 16L fine on Edelweiss AMC, 2 officials for rule violation

Capital markets regulator Sebi on Friday imposed penalties totalling Rs 16 lakh on Edelweiss Asset Management Ltd, its CEO Radhika Gupta and fund manager Trideep Bhattacharya for violating mutual fund rules.

Individually, penalty of Rs 8 lakh was levied on Edelweiss Asset Management and Rs 4 lakh each on Gupta and Bhattacharya, according to an order passed by Sebi.

Also, they have been directed to pay the amount within 45 days.

While undertaking an industry wide analysis of whether focused funds are true-to-label or not, Sebi noted that Edelweiss Focused Equity Fund (EFEF) had violated the provision 'an open ended equity scheme investing in maximum30 stocks' on 88 days.

The deviations from mandatory asset allocation were observed for the months of November 2022, December 2022, January 2023 and February 2023.

In its order, Sebi said, "noticee No. 1 (Edelweiss Asset Management) had failed to ensure that the asset management company took all reasonable steps and exercised due diligence to ensure that the investment of funds pertaining to any scheme was not contrary to the provisions of these (MF )regulations."  Further, Gupta, being the CEO of Edelweiss Asset Management, and Bhattacharya, being the fund manager of EFEF, had failed to ensure that the funds of the schemes were invested to achieve the investment objective of the scheme.

Through such act, they had violated the provisions of mutual fund rules.

Earlier this week, former fund manager of Edelweiss Asset Management Abhishek Gupta settled a case pertaining to alleged violations of mutual fund rules with Sebi following a payment of Rs 19.5 lakh towards settlement charges.

Gupta allegedly failed to ensure that the funds of the schemes were invested to achieve the objectives of the scheme and by doing so he allegedly violated mutual fund rules.  Sebi rolls out reporting format for RAs and PAs  Sebi on Friday came out with a standardised format for periodic reporting for research analysts (RAs) and proxy advisors (PAs). The regulator has recognised the Research Analyst Administration and Supervisory Body (RAASB) for the administration and supervision of RAs under the RA Regulations. As the proxy advisers are registered under the RA norms, they will also come under the purview of RAASB. In its circular, Sebi said that RAs will submit their periodic report to RAASB, and PAs will submit their periodic reports to Sebi. The periodic reports will be submitted by RAs/PAs within 30 days from the last date of the reporting period.  

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