INSUBCONTINENT EXCLUSIVE:
Mumbai: The Securities and Exchange Board of India (Sebi) has asked all mutual funds and alternative investment funds (AIFs) to monitor
their investments in listed companies.
The regulator on Tuesday mandated these institutional investors to have a comprehensive policy on
discharge of their stewardship responsibility and on how to manage conflict of interest in fulfilling their responsibility.
Sebi has
proposed five principles that fund houses have to follow under the proposed stewardship code including a policy on intervention in their
investee companies by collaborating with other institutional investors where required to protect the interest of ultimate investors.
Fund
houses and AIFs should also have a clear policy on voting and disclosure of voting activity.
In 2010, Sebi had asked all mutual funds to
across the world is increasing, they are expected to shoulder greater responsibility towards their clients / beneficiaries by enhancing
Such increased engagement is also seen as an important step towards improved corporate governance in the investee companies and gives a
to which such matters may be referred to, segregation of voting function and client relations and sales function.
While monitoring their
investee companies, investors should also keep in mind regulations on insider trading while seeking information, Sebi said.
The regulator
said circumstances for intervention may include poor financial performance of the company, corporate governance-related practices,
remuneration, strategy, leadership issues and litigation, among others