Page 15 - Banking Finance November 2021

MUTUAL FUND

tion, the tribunal has asked the Asset Schemes, which invest in overseas se- dend payout, while the price return
Management Company (AMC) to de- curities, could choose any global index such as Nifty and Sensex are
posit a sum of Rs 20 lakh within four equivalent of the BRSR specified by the based on the prices of the stocks.
weeks into an interest bearing account. Association of Mutual Funds in India
(AMFI), Sebi said in a discussion paper. ESG funds may have to
Sebi, in August, had asked the AMC to
refund a part of the investment man- keep 80% in sustainable
agement and advisory fees collected HDFC AMC Q2 profit up
from the unit holders of the six Fixed 2% to Rs 344 crore companies
Maturity Plan (FMP) schemes with 15 The Securities and Exchange Board of
per cent interest per annum. In addi- HDFC Asset Management Company India (Sebi) has proposed that environ-
tion, the Securities and Exchange Board (AMC) reported a nearly 2 per cent ment, social and governance-based
of India (Sebi) imposed a penalty of Rs growth in profit after tax (PAT) to Rs funds (ESG funds) should have at least
50 lakh on Kotak Mahindra AMC and 344.38 crore for the three months to 80% of their total assets in securities
barred the fund house from launching September 2021. In comparison, the following the sustainable theme, since
firm had posted a PAT of Rs 338.06 these funds fall under the thematic cat-
any new FMP scheme for six months for
crore in the same quarter of the pre- egory. The regulator also proposed that
violating the regulatory norms.
ceding fiscal, the asset management the rest 20% assets should not be in
The company had approached SAT company said in a regulatory filing to stark contrast with the ESG philosophy.
against Sebi's order. "The direction to the stock exchanges. Earlier in 2017, Sebi had said that
refund a part of the investment man- sectoral or thematic funds must have
agement and advisory fees collected by The company's total income increased at least 80% of investments in specific
the appellant (Kotak Mahindra AMC) to Rs 608.4 crore in the period under sectors or themes.
from the unit holders shall remain review from Rs 569.95 crore in the
quarter ended September 30, 2020.
stayed,"
NJ Mutual Fund raises Rs.
Sebi proposes new norms Sebi introduces a two- 5,200 crore in Balanced

for mutual funds' ESG in- tiered structure for Advantage Fund NFO
vestments benchmarking MF schemes NJ Mutual Fund has raised around Rs.
5,200 crore in the new fund offer (NFO)
The Securities and Exchange Board of The Securities and Exchange Board of of its balanced advantage fund (BAF). NJ
India (Sebi) has proposed to revise the India (Sebi) has decided to bring in a Mutual Fund received its licence on 30
investment norms for mutual fund two-tiered structure for benchmarking April 2021 and is part of the NJ Group,
schemes that invest as per the ESG of certain categories to standardize one of India's largest mutual fund dis-
(Environment, Sustainability and Gov- benchmarks of mutual fund schemes. tribution firms. The bulk of the collec-
ernance) philosophy. The first-tier benchmark will be ac- tions has come through the NJ's own

The markets regulator has proposed cording to the category of the scheme. mutual fund distribution arm, with
that from October 1, 2022, asset man- The second-tier should be reflective of around Rs. 230 crore coming from
agement companies should only invest the investment style or strategy of the about 140 non-NJ distributors and reg-
in securities with Business Responsibil- fund manager within the category. istered investment advisers NJ Mutual
Fund has a total of about 225,000 inves-
ity and Sustainability Report (BRSR) Usually, the performance of a mutual tors from more than 600 districts in 35
disclosures. fund scheme is assessed with reference
to a benchmark, which could be a to- states and Union territories, its chief
The existing investments in the executive officer Rajiv Shastri told. As a
tal return index (TRI) of CNX Nifty or
schemes for which there are no BRSR BSE Sensex. mutual fund distributor, NJ Wealth con-
disclosures would be grandfathered by tributes more than Rs. 118,000 crore of
Sebi until September 30, 2023. In ESG All the benchmarks should follow TRIs, the MF industry's current AUM. The
investing, a fund manager picks com- the markets regulator reiterated in a group also has a portfolio management
panies whose operations are consid- circular issued. TRIs take into account service (PMS) that manages about Rs.
ered socially responsible. the prices of the stocks and the divi- 3,000 crore in assets.

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