Sebi directs AMCs to set up audit committee with minimum three directors

At least two-third of the directors will be independent directors of the AMC

Market regulator Sebi has directed the mutual fund (MF) industry to set up an audit committee at the asset management company (AMC) level. Currently, such a committee is set up by the trustee of a fund house.

The committee shall be responsible for oversight of the financial reporting process, compliance to laws and regulations.

The audit committee will require a minimum of three directors and at least two-third of them shall be independent directors of the AMC. The members of the audit committee will be appointed by the board of the AMC.

The changes will come into effect from August 01.