Sebi to tighten norms on fund manager exits
MUMBAI: The recent events at Axis Mutual Fund and skeletal press statements on suspension and eventual termination of two fund managers has irked the market regulator.
The Securities and Exchange Board of India ( Sebi) is not impressed with the lack of disclosure on what led to the dismissal of the two equity fund managers.
“Taking cognisance of this so-called lack of disclosure, the market regulator is working on norms for disclosure standards for fund house level changes. Sebi is working on when and how disclosures should be made in such circumstances,” said a senior regulatory official on the condition of anonymity.
“Sebi believes in more disclosures the better. So something similar would be made mandatory for fund houses in case fund managers are asked to exit or the fund house/ specific schemes go through some major management changes. Sebi’s mutual fund department is working on something, these new norms will be announced soon,” this person added.
Axis Mutual Fund last week terminated two fund managers - Viresh Joshi and Deepak Agartion. wal, who were earlier suspended on charges of alleged misconduct on May 4 pending investigations.
The fund house issued two statements announcing the change in the fund managers however in both the instances there were no details behind these changes, sparking worry amongst investors.
The statement on termination of their services did not shed any light on whether Axis Mutual Fund had completed the suo moto probe and on what grounds were they terminated.
This left room for speculation on whether they were front-running, or there were kickbacks and on the size of the manipula
“Axis had started the suomoto investigation against the two officers in the month of March but it suspended them and issued a press statement only after there was media scrutiny. Considering that Sebi is working on industry level changes Axis will also be forced to issue a more detailed statement,” said a person with knowledge of the matter.
Another fund house, Aditya Birla Sun Life Mutual Fund issued a press statement on closure of a whistleblower complaint only after The Morning Context, an online news publication, made the charges levelled in the compliant public.