Page 18 - Banking Finance March 2023

MUTUAL FUND

ment for women, Mahila Samman Sav- pying permanent directorship in a funds in the total asset under manage-
ings Certificate, which will come with company, the capital markets regula- ment (AUM) of institutional investors
a two-year tenure and will be open for tor Sebi proposed that the listed enti- was at a record high of 18.3% in Janu-
subscription up to March 2025. ties should take shareholders approval ary 2023, helped by a consistent do-
at least once in 5 years for the appoint- mestic inflow of funds. According to
Demat accounts surge ment of directors to serve on their the data from depositaries, their share
board. increased by nearly 130 basis points
31% to 11 crore in January
year-on-year, the highest among all
It said not all directors serving on the
As per the data, the number of demat
board of listed entities may be subject investor categories. It is now the sec-
accounts rose to 11 crore in January
ond highest after the share of foreign
to retirement by rotation and there
2023 from 8.4 crore in January 2022, portfolio investors (FPIs) at 37.2%.
may be some directors who are ap-
registering a growth of 31 per cent.
pointed to the board of a listed entity
Market experts believe that the addi-
without a defined tenure and not liable NSE asks traders to stop
tion in dematerialised (demat) ac-
to retirement by rotation.
counts over the last one year was using 61 nomenclatures
"In the interest of good corporate gov-
mainly due to attractive returns given
like mutual funds
ernance at listed entities, all directors
by the equity markets and the ease of
National Stock Exchange of India or
appointed to the board of a listed en-
account opening process offered by
NSE asked trading members and
tity need to go through periodic share-
brokers to their clients.
authorised persons to stop using words
holders' approval process, thereby pro-
Also, increased financial literacy and like advisors, asset/wealth/portfolio
viding legitimacy to the director to
the growing popularity of trading
continue to serve on the board," Sebi management, mutual funds, mutual
amongst youth have been some other
proposed in a consultation paper on fund services and so on as it creates a
major factors contributing to the rise,
strengthening corporate governance wrong impression among investors.
they added.
at listed entities by empowering share- The exchange has listed 61 words that
While the number of demat accounts are not permitted to be used by trad-
holders.
continues to rise, the count of National ers.
As on March 31, 2024, if there is any
Stock Exchange (NSE) active clients has
director serving on the board of a "It is observed by Exchange that Trad-
been falling for seven consecutive
listed entity without his / her appoint- ing Members/Authorized Persons are
months.
ment or re-appointment being subject using words such as Advisors, Asset/
The number of active accounts at the
to shareholders' approval during the Wealth/Portfolio Management etc. in
NSE dropped 2.9 per cent month-on-
last five years i.e., from April 1, 2019, their name which is misleading and
month to 3.4 crore in January, making
the listed entity shall take sharehold- may indicate to the clients/investors
it the seventh consecutive monthly
ers' approval in the first general meet- that the Trading Members/Authorized
decline. On a year-on-year basis, the
ing to be held after April 1, 2024, for Persons are registered for offering ser-
number of such active users rose 2.7
his / her continuation on the board of vices other than broking services with-
per cent. The intensity of the fall was
the listed entity, the markets regula- out having the applicable registration
higher at 10.4 lakh accounts in Janu-
tor said. for those services with SEBI/other
ary as compared to 7 lakh for the past
regulators," said the exchange.
three months.
Share of local mutual
The name of Trading Member/Autho-
SEBI mulls shareholders funds in total institutional rized Person should reflect the regis-
tration held by the entity and should
nod for board directors equity AUM at a record
not in any way create an impression of
appointment once in 5 yrs high in January
performing a role for which the entity
In order to stop the practice of occu- The share of the domestic mutual is not registered, the circular said.
16 | 2023 | MARCH | BANKING FINANCE