Sebi may tighten MFs' risk monitoring practices

AMCs could be asked to form independent committees overseen by trustees to mitigate risks

Increasing fears of debt default in Corporate India may prompt the Securities and Exchange Board of India (Sebi) to nudge the trustees and sponsors of asset management companies (AMCs) to play a more active role in managing risks.

The regulator is deliberating on making it mandatory for fund houses to form internal risk assessment committees comprising key AMC personnel and external consultants, according to two people familiar with the matter. The functioning of the committee will be monitored by the trustees.

The need for better risk monitoring was discussed in a recent meeting between the mutual fund advisory committee and