AAP’s request to appoint Raghav Chadha as party’s interim leader in Rajya Sabha rejected Rajya Sabha Chairman Jagdeep Dhankhar has turned down Aam Aadmi Party (AAP) national convener Arvind Kejriwal’s request to appoint Raghav Chadha as the party’s interim leader in the Upper House of Parliament. AAP’s Sanjay Singh, who is the current floor leader of the party in the Rajya Sabha, is in judicial custody. “This aspect is subject to ‘The Leaders and Chief Whips of Recognised Parties and Groups in Parliament (Facilities) Act. 1998’ and the Rules made thereunder. The request, not being in conformity to applicable legal regime, is not being acceded to,” Dhankhar in a letter to Kejriwal said, PTI reported, citing sources. With the development, Singh continues to remain the leader of the AAP in the Rajya Sabha. In August, Chadha was suspended from the Upper House on the last day of the Monsoon Session for allegedly forging the signatures of five MPs – BJP’s S Phangnon Konyak, Narhari Amin and Sudhanshu Trivedi, AIADMK’s M Thambidurai and BJD’s Sasmit Patra — on a motion related to the Government of National Capital Territory of Delhi (Amendment) Bill, 2023, in the Rajya Sabha. The motion was moved by BJP leader Leader of the House in Rajya Sabha Piyush Goyal, who called Chadha’s action “unethical”. He was suspended for “gross violation of rules, misconduct, defiant attitude and contemptuous conduct”, pending a report by the Privileges Committee. Following this, Chadha had moved the Supreme Court against his “indefinite” suspension from the Upper House, calling it “arbitrary and illegal”. During the Winter Session of the Parliament, Chadha’s suspension was revoked by the RS Chairman on a motion moved by BJP MP GVL Narasimha Rao. He said that the suspension suffered by the AAP MP so far should be considered as “sufficient punishment”.
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In its consultation paper, Sebi has suggested that trustees of mutual funds should focus on market abuse by AMC, its employees and mis-selling by the AMC to increase the asset base.
Also, trustees should be responsible for fairness of fees and expenses charged by the AMC, compare its performance with peers and ensure that AMC’s sponsor is not getting any undue advantage.
In addition to the core areas, the trustees should be responsible for periodically reviewing the steps taken by AMCs for the folios which do not contain all KYC attributes with bank details.
Further, Sebi has suggested that trustees and their resource persons should independently evaluate the extent of compliance by AMC and not merely rely on AMC’s assurances.
To facilitate trustees’ supervision, AMCs should provide them with analytical information.
Presently, the trustees primarily rely on the AMCs for ensuring compliance with the applicable rules.
Under the rules, trustees hold the property of the mutual fund in trust for the benefit of the unitholders. The trustees appoint an AMC to float schemes for the mutual fund and manage the funds mobilised under various schemes, in accordance with the investment objectives.
“In view of the increasing scale and reach of the mutual fund industry, trustees’ role in respect of unitholders’ protection assumes even greater significance,” Sebi said on Friday.
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Over the past decade there has been a five-fold increase in the size of the mutual fund industry. The assets under management (AUM) has surged from Rs 7.93 lakh crore in November 2012 to Rs 39.89 lakh crore in December 2022.
To ensure that trustees devote time and attention to their core responsibilities, Sebi has suggested that for fulfilling other responsibilities, trustees may rely on professional firms such as audit firms, legal firms, merchant bankers for carrying out due diligence on their behalf.
The Sebi also listed some duties trustees can delegate to AMCs. This include ensuring that all systems are in place prior to the launch of any scheme by the AMC, and calculating any income in the mutual fund due to the fund and any income received in the mutual fund for unitholders.
The regulator has proposed to provide a one year time to existing trustees with board of trustee structure to convert into a trustee company, from governance point of view.
Presently, two structures for trustees are permitted — corporate and board of trustees structure. Moreover, there are a few mutual funds which have the board of trustees structure while the trustees of all other mutual funds have adopted the structure of a trustee company.
Considering the enhanced role of trustees over the period of time, Sebi has suggested to increase the minimum number of trustees to adequately perform their functions. Presently, the minimum number of trustees prescribed is four.
Also, it has been proposed that the chairperson of the trustee company should be an independent director.
Sebi has suggested that apart from the meeting of the audit committee of AMCs and trustees (which mostly comprises of independent directors), the board of AMCs and the board of trustees may be mandated to meet at least once a year to discuss the issues concerning the mutual funds.
The regulator proposed that the existing MF Regulations on AMC and its obligations may be amended to include additional clauses with respect to the obligations of the board of AMC.
The proposed amendment may include a clause which casts an obligation on the board of AMC to ensure that all the activities of the asset management company are in accordance with the provisions of these regulations.
The Securities and Exchange Board of India (Sebi) has sought comments from public till February 24 on these proposals.