The Association of Mutual Funds in India (Amfi), in its latest advisory to all asset management companies (AMCs), has said that all employees of mutual fund houses, especially the ones handling critical roles such as dealing in markets should resume work from office by June 10 and the flexibility given to the employees to work from home (WFH) should be withdrawn.
“The flexibility given to employees to work from home, especially those handling critical functions that deal with the markets, such as investments, dealing, operations, compliance/risk management etc. may be withdrawn. This may be implemented at the earliest, but no later than June 10, 2022,” said NS Venkatesh, chief executive, Amfi, in an internal communication to CEOs of AMCs.
The advisory comes in the wake of recent case of front-running by fund managers at Axis Mutual Fund. Two fund managers, Viresh Joshi and Deepak Agarwal, of Axis MF were sacked this month after an investigation was carried out against them amid allegations of irregularities.
The culture of work from home amid the pandemic has affected the controls and surveillance measures to capture such actions.
People in the mutual fund industry told FE on Thursday that the decision was expected anytime soon and the findings in the Axis MF case have only rushed it. They also added that “there could be more fund managers under the scanner, outside of Axis MF”. However, they believe that the decision to bring all employees back to office will lower the risk of such cases due to high compliance and monitoring in dealing rooms at offices.
Back in 2020, Amfi had mandated a recorded line (calls) for employees dealing into markets for surveillance measures and to keep a check on any malpractices that might occur.
The mutual fund body in the communication to CEOs further said that the decision to withdraw WFH is considering that the government and local municipal authorities have lifted all restrictions imposed earlier and “things are now completely back to normal”. Amid the outbreak of Covid-19, Amfi had advised all members to strictly follow the rules stated by the Centre and asked employees to work from home, carrying out all transactions digitally.