MUMBAI, June 2: The Securities and Exchange Board of India (Sebi) has slapped a penalty of Rs 2 lakh on Morgan Stanley Asset Management for violation of various guidelines governing mutual funds.

According to the Sebi, the major violations by the Morgan Stanley Mutual Fund include ``undertaking activity akin to an asset management company (AMC) for clients other the Morgan Stanley Mutual Fund without the prior approval of the Sebi, exceeding the 5 % investment ceiling in companies and failure to deliver securities sold in the market.''

Sebi had appointed an adjudicating officer against Morgan Stanley to look into the violations. The officer was appointed based on the findings of inspection carried out by independent auditors.

It is learnt Morgan Stanley Mutual Fund undertook asset management activities on behalf of its parent firm Morgan Stanley Asset Management of New York. Morgan also violated SEBI norms by investing more than 5 % of the equity capital in several companies like Punjab Concast and S & S Power Switches.

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