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As many as 33 mutual fund houses were found to have violated the ‘20-25 rule’ which requires a minimum of 20 investors and a cap of 25 per cent investment by an individual investor in a particular scheme, Parliament was informed on Tuesday.
Large-scale violations in several schemes of such fund houses were found by capital market regulator SEBI.
“Letters were issued to 33 mutual funds, wherein individual unit holders were observed holding more than 25 per cent of the scheme’s quarterly average net assets,” Minister of State for Finance Nirmala Sitharaman said in a written reply to the Rajya Sabha.
She advised them to comply with the ‘20—25’ norms in “letter as well as in spirit.”
The fund houses were also advised to strengthen its systems and improve its compliance standards to avoid recurrence of such instances, failing which penal actions would be taken in accordance with the provisions of SEBI regulations.
Currently, there are about 45 fund houses in the country, which together manage assets worth about ₹10 lakh crore.
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