The definition of “associate” has been removed from the mutual fund regulations by Sebi in order to exclude sponsors who make investments on behalf of insurance policy beneficiaries.
According to an announcement from the Securities and Exchange Board of India (Sebi), the new regulations will take effect on September 3.
The plan was approved by the regulator’s board last month.
“The definition of associate shall not be applicable to such sponsors, which invest in various companies on behalf of the beneficiaries of insurance policies or such other schemes,” the regulator said.
A person who directly or indirectly, independently or in concert with relatives, exercises control over the Asset Management Company (AMC) or the trustee, among other entities, is referred to by the rules as an associate.
There are currently 43 mutual fund companies, and they collectively handle assets of close to ₹38 lakh crore.
