Sebi beefs up risk management norms, asks MFs to appoint dedicated officer

Risk to be divided into two broad categories--scheme-specific and AMC-specific--with further sub-divisions in each

The Securities and Exchange Board of India (Sebi) on Monday announced a new risk management framework (RMF) for the mutual fund (MF) industry. The framework prescribes procedures, risk management functions, roles and responsibilities to be followed by the management.

“There should be at least one CXO level officer identified to be responsible for the risk management of specific functions of the MFs. AMC should have a Chief Risk Officer (CRO), who would be responsible for the overall risk management of the mutual fund operation including the key risks,” said Sebi in the circular.

The risk shall be divided into two