INSUBCONTINENT EXCLUSIVE:
SEBI said fund houses have to adhere to the new risk management rules from January 1.Mumbai: India's market regulator on Monday tightened
risk management rules for mutual funds, including specifying guidelines to identify, measure and report various risks, in an effort to
protect the interest of investors in a fast-growing industry
The new rules mandate the appointment of a chief risk officer, creation of risk management committees and maintaining metrics such as
investment risk, liquidity risk and credit risk for each scheme, the Securities and Exchange Board of India (SEBI) said.The new framework
comes a month after it barred Kotak Mahindra Asset Management, one of the country's largest mutual fund managers, from launching any fixed
maturity plans (FMPs) for six months and fined it for breaking rulesSEBI also barred Franklin Templeton in India in June from launching any
new debt schemes for two years after it found "serious lapses and violations" at the firm when it decided to suddenly shut several
schemesFranklin has appealed against the decision, but agreed it would not launch any new debt funds for the time being
In its new rules on Monday, SEBI provided detailed guidelines on the risk management roles for an asset management company's board,
trustees, chief executive officer, chief investment officer, other senior officials and fund managersThe mutual fund industry has grown
rapidly in India, especially with interest from retail investors in systematic investment plans that allow investment of a fixed amount
Assets managed by India's mutual fund houses have increased to about Rs 36 lakh crore ($487.72 billion) in August from nearly Rs 28 lakh
crore a year earlier, according to the Association of Mutual Funds in India (AMFI).SEBI said fund houses have to adhere to the new risk
management rules from January 1 and review their compliance every year.(This story has not been edited by TheIndianSubcontinent staff and is
auto-generated from a syndicated feed.)
