Invesco agrees to pay Rs 5 cr to Sebi for settlement in MF violation case

In an inspection conducted in 2021, the market regulator found that there was no clear segregation of activities between portfolio management activities and mutual fund activities of the firm

Invesco Asset Management (India), its Chief Executive Officer Saurabh Nanavati, and four others have settled a matter with the Securities and Exchange Board of India (Sebi) related to alleged violations of mutual fund (MF) and portfolio management norms.

The asset management company (AMC) and others have settled the matter by jointly paying Rs 4.98 crore under Sebi’s settlement mechanism.

The market regulator has received an undertaking that systems have been put in place to prevent the recurrence of similar lapses.

In an inspection conducted in 2021, the watchdog found that there was no clear segregation between portfolio management activities and MF activities of the firm.

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Moreover, the portfolio management services arm did not have adequate manpower and infrastructure, nor did it maintain an arm’s length from the MF business.

“Inter-scheme transfers were executed, and there were movements of securities/pre-arranged trades/layered trades between schemes of Invesco MF and PMS Advisory in violation of the provisions of Sebi (Mutual Funds) Regulations,” the regulator alleged in the show cause issued in August 2023.

The AMC had filed for settlement without admitting or denying the findings of fact. Sebi has settled the matter after a recommendation from its high-powered advisory committee.

Invesco MF is the 17th-largest fund house in India with average assets under management of over Rs 74,300 crore in the January-March quarter (2023-24).

Earlier this month, Hinduja Group’s IndusInd International Holdings announced its entry into the asset management space with the acquisition of a 60 per cent stake in US-based Invesco’s domestic arm, Invesco Asset Management (India).

 

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As a part of its tech strategy, 360 One PE had inve­sted about Rs 191 crore in the online financial product distributor across different funds. It overall realised Rs 451 crore from its investment.  

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