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Our Market Bureau
Mumbai, Sept 16: The Association of Mutual Funds in India (Amfi) has submitted a detailed report to Sebi on how voting rights of unitholders of mutual funds can be utilised. Amfi has suggested to Sebi that ballots should be used for casting of votes by unitholders when mutual funds have change the basic structure of existing schemes.
``We have suggested to Sebi that one-vote-for-unit be considered in case of voting by unitholders. For example if an investor has 100 units of a particular scheme, he will have the right to cast one vote per unit that is he will have 100 votes,'' said the chairman of Amfi, AP Kurian.
Thus, when a mutual fund wants to change the structure of an existing scheme, he has to approach the trustees, its unit holders and Sebi to get the permission. For example, if the mutual fund wants to convert a growth scheme into a balanced fund, it requires the permission of unitholders as well. In case of closed-end schemes that want to go open-ended, mutual funds require only the permission ofits trustees and Sebi.
Meanwhile, Amfi has given teh mandate to Crisil for working out the evaluation procedure for fair valuation of untraded debt paper. ``Crisil will work on developing a software solution for all mutual funds as it will require extensive information and data on debt. Earlier, both I-Sec and Crisil were technical consultantst but the final mandate has been given to Crisil. Crisil will define the benchmark, the matrices, the ratings on instruments and the spread on matrices,'' said Kurian.
The software package will be uniform and user friendly, as the funds will only have to key in the relevant information. The package will itself work out the fair valuation on the basis of current data available. The package is likely to get ready in a month or two as Crisil is already on the job. After the package is ready, Amfi plans to distribute it to members who can use the new system for a month and thus see the difference in the existing and the new system before making the systemmandatory.
Amfi is waiting for the stock lending scheme of UTI to kick-off so that other mutual funds can follow suit. Amfi is also taking up the issue of evaluation of thinly and infrequently traded equity as there is no mechanism for their fair evaluation.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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