To avoid the potential conflict of interest, markets regulator SEBI is considering to put a 10 per cent cross-shareholding cap in mutual funds, senior officials said.
The new measure may have an impact on the shareholding pattern of UTI Asset Management Company.
State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation havei their own mutual funds and at the same time they hold 18.24 per cent stake each in UTI AMC.
The issue would be taken up at the board meeting of SEBI on Thursday, officials added.
Under the proposal, any shareholder owning at least 10 per cent stake in an AMC will not be allowed to have 10 per cent or more stake in another mutual fund house operating in the country.
Further, a sponsor of a mutual fund, its associates, group company and its asset management company will be restricted from holding 10 per cent or more stake in a rival AMC.
In addition, such entities will be barred from having representation on the board of another mutual fund house.
The new norms are aimed at avoiding conflict of interest and helping strengthen the governance structure of mutual funds.
SEBI may come out with a new framework for investment advisors in order to segregate advisory and role of a distributor.
Published on December 27, 2017
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