The Hindu Business Line : `Compliance officers must for AMCs'

WITH prior approval of the trustees or the trust company, every Asset Management Company (AMC) should appoint a compliance officer, who should be the "first-level verifying officer" and should assist the trustees in discharging their obligations within the regulatory framework.

This was one of the suggestions made in the report of the working group on Mutual Fund that was released by the Securities and Exchange Board of India (SEBI) on Monday. The report of the working group of trustees, set up under the chairmanship of Mr P.K. Paul, is expected to help SEBI consider the amendments to the regulations to facilitate further development of the domestic mutual fund industry.

Stressing on the appointment of a compliance officer, the report feels that this officer should be provided with adequate infrastructure to enable him to carry out his duties, which include scrutinisation, verification and confirmation of each document, declaration, report and return submitted by the AMC and any other individual to the trustee or the trust company.

Another suggestion envisages introduction of the concept of professional trustee company on an optional basis in the mutual fund regulations.

The report was clear that if, in the opinion of SEBI, the interest of unit holders was affected, SEBI can prescribe a requirement of obtaining a prior approval of the unit holders. "But in all other cases, the amendment in trust deed needs to be allowed with the prior approval of SEBI alone," it pointed out.

The terms of reference of the working group included administrative support to trustees, structure of trustees, trustees manual, reporting requirement of trustees and any other issue pertaining to the role of trustees.

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