Sebi tightens forensic audit disclosure norms, introduces Code of Conduct for Fund Managers

However, forensic audit initiated by regulatory or enforcement agencies need not be disclosed, Sebi said.

Further, among a slew of decisions taken, the board also approved the amendment of Mutual Fund Regulations to introduce a Code of Conduct for Fund Managers including Chief Investment Officers and Dealers of AMCs. The Chief Executive Officer will be responsible to ensure that the Code of Conduct is followed by all such officers.

At present, this code of conduct is only applicable to trustees and the AMC.

The Board approved an amendment to MF Regulations to enable Asset Management Companies to become a self-clearing member of the recognised Clearing Corporations to clear and settle trades in the debt segment of recognised stock exchanges, on behalf of its mutual fund schemes.

The regulator also approved the proposal of strengthening the role of Debenture Trustees (DT) so as to protect the interest of debenture holders. The debenture shall exercise independent due diligence of the assets on which charge is being created. The DT shall take required action by convening the meeting of debenture holders for enforcement of security, joining the inter-creditor agreement (under the framework specified by RBI), etc.

Sebi also approved setting up of a limited purpose repo-clearing corporation.