The Securities and Exchange Board of India (Sebi) has asked mutual funds (MFs) to provide details about the steps they have taken in the last one year in ensuring better corporate governance standards among public listed companies.
In March 2010, Sebi through a circular had asked fund houses to play an active role in varied issues picking up the gauntlet on behalf of retail investors.
Waqar Naqvi, CEO of Taurus MF says, ?This move will help minority shareholders who don’t have much say in the listed companies.
It will also help investors to know, what decision have been taken in the AGM and whether it will have any implications on investments made by retail investors.?
Last year?s circular also mentioned that asset management companies (AMC) should disclose their general policies and procedures for exercising the voting rights in respect of shares held by MFs on its website as well as in the annual report distributed to the unit holders from the financial year 2010-11.
According to sources, regulator is seeking details as to concrete steps taken by the fund houses in this regard and if they have found any wrong-doing in any listed company.
Dhirendra Kumar, CEO of Valueresearch says, ?I think Sebi wants to know what steps fund houses have taken in the last one year and if they have they managed to raise any important questions in the AGM meetings of listed companies?.
He however added that MFs don?t have much of a voice currently as their holding is very low as compared to other category of investors. Today, MFs own less than 3% of all listed stocks in the country.
Sebi had further mandated that, voting policy should be disclosed on the website and updated regularly.
?It was found that, there was no proper updation on the part of the fund houses. This move will bring more transparency for the retail investors,? said an official from the leading fund house.
Fund houses like HDFC MF, Religare MF and UTI MF have uploaded their voting policy on their respective website.
