Mumbai, June 23: In the wake of the CRB Mutual Fund fiasco, the Securities and Exchange Board of India has tightened the noose around the mutual funds by asking them to furnish all the compliance reports by June 30.

The details sought by SEBI are for the first quarter ended March 31, 1997 after the new regulations were notified.

The regulatory body had recently issued an adjudication order against Morgan Stanley Asset Management for violating SEBI norms. It is learnt that SEBI will issue similar orders against three other mutual funds.

In order to see that the mutual fund industry functions strictly within the new guidelines, SEBI has sought details under clause 18 (4) of SEBI (Mutual Funds) Regulations, 1996.

Under this, each fund is expected to appoint a separate compliance officer to meet the accounting and other norms finalised by SEBI. Also, the mutuals are expected to prepare compliance manuals before launching new schemes.

``The mutual funds should not have any complaints as regards furnishing of the details sought,'' said a top SEBI source. ``The compliance test formats were finalised after discussing in detail before the board of AMFI on April 30, 1997.''

According to a SEBI source, these compliance formats will force the mutuals to strictly follow the new mutual fund regulations, calculate the net asset values (NAVs) as per the standardised formats and compute the values strictly according to the norms. All this would help improve investor confidence.

In a recent communication to all mutual funds registered with SEBI and UTI, SEBI has sought the name of the compliance officer appointed by each mutual fund and also asked whether the compliance manuals have been placed before the board of the AMC, board of trustees or the trustee company.

These details will give a clear picture as to how the fund is investing and also keep SEBI informed as to how the industry as a whole is meeting the inter- and intra-scheme transfer norms.

The first report on the compliance test formats `must be submitted for the first quarter following the notifications of the new regulations, i.e, for the quarter ended March 31, 1997 should reach the Securities and Exchange Board of India before the end of June 1997.

As regards the compliance formats for the quarter ending June 30, 1997 it should reach SEBI by July 15, 1997.

The compliance test reports are to be furnished under three heads: One, general compliance test; two, investment compliance test and three investor services compliance test.

These tests, covering all the schemes of the mutual fund, are to be signed by the compliance officer of the AMC and submitted to SEBI quarterly. These must reach SEBI by 21 of the month following the quarter.

In addition to the compliance details sought under the three heads, SEBI has also sought details of investment in companies in excess of 10 per cent of their paid up capital carrying voting rights; inter- and intra-scheme transfers; borrowing by mutuals and value of business done through brokers, brokerage paid to the brokers and percentage of gross business done through the brokers.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.