Reliance Industries, Cipla, Eicher Motors, Tata Power, HG Infra Engineering stocks in focus Indian benchmark indices are likely to open in the green today as hinted by the SGX Nifty which is 0.3% higher at 18,340. Nifty Futures gained 60 points on the Singaporean exchange. In the previous session, NSE Nifty recovered 200 points from its intraday low and closed at 18,191, while BSE Sensex gained 0.3% to settle at 61,133. From dropping over 0.5% intraday. “The domestic market trend was influenced by the movements of its global counterparts, as a negative US closing pushed Indian bourses to a poor start. However, positive signals from US futures lifted the benchmark index above the flatline. Markets will continue to witness such sudden movements, underpinned by lingering recession and COVID fears, which will be countered by bargain hunters,” said Vinod Nair, Head of Research, Geojit Financial.Stocks in focus on 30 December, Friday Reliance Industries: Reliance Consumer Products (RCPL), the FMCG arm of Reliance Retail Ventures (RRVL), will acquire 51% stake in Lotus Chocolate for Rs 74 crore. RCPL will also make an open offer to public shareholders of Lotus to acquire up to 26% stake. Eicher Motors: The parent company of Royal Enfield, Eicher Motors, announced a strategic investment with Spain-based Stark Future SL to collaborate in the electric mobility space. Eicher Motors invested Rs 441 crore for 10.35% equity stake in Stark Future. Tata Power: Through the issue of non-convertible debentures on a private placement basis, Tata Power has raised Rs 1,000 crore. Series I NCDs worth Rs 500 crore are expected to mature on January 8, 2030, while Rs 500 crore of Series II NCDs are expected to mature on December 29, 2032. HG Infra Engineering: The firm recently announced they received a “letter of award” for a new project from the National Highways Authority of India (NHAI). HG Infra will construct a 6-lane greenfield Karnal ring road under Bharatmala Pariyojana in Haryana within 730 days and the bid project cost is Rs 997.11 crore.
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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.