Mumbai :  Market regulator Sebi has asked mutual fund houses to make monthly disclosures about assets managed by them and explain the rationale behind exercising their voting rights in companies, as part of long term policy for the industry effective from April 1, reports PTI.

The first-ever long term policy for over Rs 9 lakh crore mutual fund industry, aimed to make it an attractive investment proposition for retail investors, also provides for bolstering distribution channels.

The market watchdog has suggested selling MFs through public sector banks and online to increase their penetration. In a circular issued on Monday, Sebi said mutual funds would be required to disclose certain additional details about their Assets Under Management (AUM) on a “monthly basis”.

This would include monthly disclosure of AUM from different categories of schemes, AUM from places beyond top-15 cities, contribution of sponsor and its associates in AUM, contribution from different types of investors (retail, corporate etc), state-wise contribution and AUM from sponsor group or non-sponsor group distributors.

Besides, the data has to put on a consolidated basis on website of Association of Mutual Funds of India (AMFI) within seven working days of the month. This circular would be effective from April 1, 2014.

The Securities and Exchange Board of India (Sebi) said mutual funds should disclose the rationale while exercising their voting rights in investee companies. “Asset Management Companies (AMCs) shall be required to record and disclose specific rationale supporting their voting decision (for, against or abstain) with respect to each vote proposal,” Sebi said.

AMCs would be required to make disclosure of votes cast on their website on a quarterly basis, within 10 working days from the end of the quarter. Further, they would need to continue disclosing voting details in their annual report. On an annual basis, AMCs must obtain auditor’s certification on the voting reports being disclosed by them.

To increase penetration of mutual fund products and to energise the distribution network, Sebi has allowed additional expense ratio of 30 basis points for garnering funds from B-15 cities.

Sebi has asked mutual funds to develop a system for active support to PSU banks for distribution of mutual funds. Besides, all MFs would need to provide online investment facility and tap the internet and mobile phone users for direct distribution of products.

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