The Securities and Exchange Board of India (Sebi) has formed two expert groups to look into the responsibilities, qualifications, and functions of sponsors and trustees at asset management firms (AMCs). A sponsor, similar to a promoter, provides funds for the establishment of an AMC, whereas a trustee serves as a supervisor and is responsible for safeguarding the interests of investors.
- Sebi stated in a statement that an alternative set of eligibility standards might be developed to allow new players who would otherwise be ineligible to function as a sponsor to do so.
- Balasubramanian, MD & CEO of Aditya Birla Sun Life AMC, will chair the working group on sponsors.
- The Sebi has intimated that it may enable private equity (PE) firms to establish AMCs.
- The working group’s mandate is to “recommend mechanisms for addressing conflict of interest that may arise if pooled investment vehicles/private equity act as sponsor; and to examine the need for sponsors to dilute their stake in asset management companies from the current requirement of holding at least 40% of the net worth and alternative pathways that may be adopted by sponsors in this regard,” according to the statement.
Meanwhile, Manoj Vaish, Independent Trustee, Mirae MF, will chair the working group on MF trustees.