- Integrity
- Members and their key personnel, in the conduct of their
business shall observe high standards of integrity and
fairness in all dealings with investors, issuers, market
intermediaries, other members and regulatory and other
government authorities.
- Mutual Fund Schemes shall be organized, operated, managed
and their portfolios of securities selected, in the interest
of all classes of unit holders and not in the interest of
- Sponsors
- Directors of Members
- Members of Board of Trustees or directors of the
Trustee company
- Brokers and other market intermediaries
- Associates of the Members
- A special class selected from out of unit holders
|
- Due Diligence
Members in the conduct of their Asset Management business shall
at all times
- Render high standards of service.
- Exercise due diligence.
- Exercise independent professional judgment.
Members shall have and employ effectively adequate
resources and procedures which are needed for the conduct of
Asset Management activities. |
- Disclosures
- Members shall ensure timely dissemination to all unit
holders of adequate, accurate, and explicit information
presented in a simple language about the investment
objectives, investment policies, financial position and
general affairs of the scheme.
- Members shall disclose to unit holders investment
pattern, portfolio details, ratios of expenses to net assets
and total income and portfolio turnover wherever applicable
in respect of schemes on annual basis.
- Members shall in respect of transactions of purchase and
sale of securities entered into with any of their associates
or any significant unit holder.
- Submit to the Board of Trustees details of such
transactions, justifying its fairness to the scheme.
- Disclose to the unit holders details of the
transaction in brief through annual and half yearly
reports.
- All transactions of purchase and sale of securities by
key personnel who are directly involved in investment
operations shall be disclosed to the compliance officer of
the member at least on half yearly basis and subsequently
reported to the Board of Trustees if found having conflict
of interest with the transactions of the fund.
|
- PROFESSIONAL SELLING PRACTICES
- Members shall not use any unethical means to sell market
or induce any investor to buy their products and schemes.
- Members shall not make any exaggerated statement
regarding performance of any product or scheme.
- Members shall endeavor to ensure that at all times
- Investors are provided with true and adequate
information without any misleading or exaggerated claims
to investors about their capability to render certain
services or their achievements in regard to services
rendered to other clients,
- Investors are made aware of attendant risks in
members' schemes before any investment decision is made
by the investors,
- Copies of prospectus, memoranda and related
literature is made available to investors on request,
- Adequate steps are taken for fair allotment of mutual
fund units and refund of application moneys without
delay and within the prescribed time limits and,
- Complaints from investors are fairly and
expeditiously dealt with.
- Members in all their communications to investors and
selling agents shall
- not present a mutual fund scheme as if it were a new
share issue
- not create unrealistic expectations
- not guarantee returns except as stated in the Offer
Document of the scheme approved by SEBI, and in such
case, the Members shall ensure that adequate resources
will be made available and maintained to meet the
guaranteed returns.
- convey in clear terms the market risk and the
investment risks of any scheme being offered by the
Members.
- not induce investors by offering benefits which are
extraneous to the scheme.
- not misrepresent either by stating information in a
manner calculated to mislead or
- by omitting to state information which is material to
making an informed investment decision
|
- Investment Practices
- Members shall manage all the schemes in accordance with
the fundamental investment objectives and investment
policies stated in the offer documents and take investment
decisions solely in the interest of the unit holders.
- Members shall not knowingly buy or sell securities for
any of their schemes from or to
- any director, officer, or employee of the member
- any trustee or any director, officer, or employee of
the Trustee Company
|
- Operations
- Members shall avoid conflicts of interest in managing the
affairs of the schemes and shall keep the interest of all
unit holders paramount in all matters relating to the
scheme.
- Members or any of their directors, officers or employees
shall not indulge in front running (buying or selling of any
securities ahead of transaction of the fund, with access to
information regarding the transaction which is not public
and which is material to making an investment decision, so
as to derive unfair advantage).
- Members or any of their directors, officers or employees
shall not indulge in self dealing (using their position to
engage in transactions with the fund by which they benefit
unfairly at the expense of the fund and the unit holders).
- Members shall not engage in any act, practice or course
of business in connection with the purchase or sale,
directly or indirectly, of any security held or to be
acquired by any scheme managed by the Members, and in
purchase, sale and redemption of units of schemes managed by
the Members, which is fraudulent, deceptive or manipulative.
- Members shall not, in respect of any securities, be party
to-
- creating a false market,
- price rigging or manipulation
- Passing of price sensitive information to brokers,
Members of stock exchanges and other players in the
capital markets or take action which is unethical or
unfair to investors.
- Employees, officers and directors of the Members shall
not work as agents/ brokers for selling of the schemes of
the Members, except in their capacity as employees of the
Member or the Trustee Company.
- Members shall not make any change in the fundamental
attributes of a scheme, without the prior approval of unit
holders except when such change is consequent on changes in
the regulations.
- Members shall avoid excessive concentration of business
with any broking firm, and excessive holding of units in a
scheme by few persons or entities.
|
- Reporting Practices
- Members shall follow comparable and standardized
valuation policies in accordance with the SEBI Mutual Fund
Regulations.
- Members shall follow uniform performance reporting on the
basis of total return.
- Members shall ensure scheme wise segregation of cash and
securities accounts.
|
- Unfair Competition
| Members shall not make any statement or become privy to any
act, practice or competition, which is likely to be harmful to
the interests of other Members or is likely to place other
Members in a disadvantageous position in relation to a market
player or investors, while competing for investible funds. |
- Observance of Statutes, Rules and Regulations
| Members shall abide by the letter and spirit of the
provisions of the Statutes, Rules and Regulations which may be
applicable and relevant to the activities carried on by the
Members. |
- Enforcement
Members shall:
- widely disseminate the AMFI Code to all persons and
entities covered by it
- make observance of the Code a condition of employment
- make violation of the provisions of the code, a ground
for revocation of
- contractual arrangement without redress and a cause for
disciplinary action
- require that each officer and employee of the Member sign
a statement that he/ she has received and read a copy of the
Code
- establish internal controls and compliance mechanisms,
including assigning supervisory responsibility
- designate one person with primary responsibility for
excercising compliance with power to fully investigate all
possible violations and report to competent authority
- file regular reports to the Trustees on a half yearly and
annual basis regarding observance of the Code and special
reports as circumstances require
- maintain records of all activities and transactions for
at least three years, which records shall be subject to
review by the Trustees
- dedicate adequate resources to carrying out the
provisions of the Code
|
- Definitions
When used in this code, unless the context otherwise requires
- AMFI
"AMFI" means the Association of Mutual Funds in
India
- Associate
"Associate" means and includes an 'associate' as
defined in regulation 2(c) of SEBI (Mutual Fund) Regulations
1996.
- Fundamental investment policies
The "fundamental investment policies" of a scheme
managed by a member means the investment objectives,
policies, and terms of the scheme, that are considered
fundamental attributes of the scheme and on the basis of
which unit holders have invested in the scheme.
- Member
A "member" means the member of the Association of
Mutual Funds in India.
- SEBI
"SEBI" means Securities and Exchange Board of
India.
- Significant Unit holder
A "Significant Unit holder" means any entity
holding 5% or more of the total corpus of any scheme managed
by the member and includes all entities directly or
indirectly controlled by such a unit holder.
- Trustee
A "trustee" means a member of the Board of
Trustees or a director of the Trustee Company.
- Trustee Company
A "Trustee Company" is a company incorporated as
a Trustee Company and set up for the purpose of managing a
mutual fund.
|
|
