SEBI proposes measures to prevent irregularities in mutual funds

Irregularities in mutual funds may cost investors dear as they may lose their hard-earned money if things fall apart. Taking the cognizance of the problem, regulatory body Sebi today (May 20) has proposed to prevent irregularities in mutual funds.

Securities and Exchange Board of India (Sebi) suggested today that mutual funds (MFs) will have to create a surveillance system to prevent malpractices. 

The regulatory body said that measures like CCTV footage, lifestyle monitoring should also be included.

Sebi said that if an irregularity is found, MFs need to form a policy in writing to decide the course of action.

Since whistleblowers exposing corruption and malpractices in any organisation are always at risk, Sebi said that all listed MFs need to ensure that they have a whistleblower policy in place.  

The board officials, like the MD, Compliance Officer of the MF, should take all necessary measures to ensure that no irregularity takes place.

It said that it would be the responsibility of the MD, Compliance Officer of the MF, to ensure that there is no disturbance.