MUMBAI, June 23: The Securities and Exchange Board of India (SEBI) has tightened the noose around the mutual funds by asking them to furnish all the compliance reports by June 30 following the CRB Mutual Fund fiasco.

The details sought by SEBI is for the first quarter ended March 31, 1997 after the new regulations were notified. The regulatory body had recently issued 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 function 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 manual at asset management companies before launching of new schemes.

``The mutual funds should not have any complaints as regards furnishing 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 SEBI source, these compliance formats will force the mutuals to strictly follow the new mutual fund regulations, calculate the net asset values (NAVs) on a 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 SEBI before the end of June 1997.

As regards the compliance formats for the quater 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. SEBI has also sought details of investment in companies in excess of 10 per cent of their paid up capital.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.