The Association of Mutual Funds of India (Amfi) in its meeting with the Securities and Exchange Board of India (Sebi) has suggested against setting up a different secretariat for trustees as recommended by the P K Kaul committee. Instead the Amfi board mooted that each mutual fund be given the freedom to have its own set up. While the Amfi board has broadly accepted most of the Kaul committee recommendations, certain minor corrections have been put forward.
The Amfi board has suggested that each of mutuals should be given the freedom to have its own set up with respect to trustees. For instance, if the trustees feel the need to appoint separate auditors for a mutual fund they should be allowed to do so.
Sebi had sought Amfi's feedback on the Kaul committee recommendations which was submitted to the market-regulator yesterday. The Amfi board is of the view that the trustee's should hold their meeting every quarter.
Amfi has also prepared a detailed procedure to evaluate untraded debt securities which will now be presented to the market-regulator. This valuation method is expected to standardise the evaluation process for non-traded debt securities.
The issue of refinement of the advertisement code for mutual funds was also taken up during the meeting. Even though the market-regulator has expressed satisfaction at the compliance by the mutual funds, it was felt that the code needs to be further fine-tuned. The refinement of the advertisement code would ensure that most mutuals would make factually correct claims in their advertisements.
