School Of Economics

Submitted To: Submitted By:

Mr N. Patidar Sir Mehzabeen Kachachawala
Amisha Garg
Nimesh Kahndelwal
Mahesh Sahu
Saket K. Mishra
 ASSET
MANAGEMENT
COMPANY
(AMC)
 Definition
► An Asset Management Company (AMC) is a firm
that invests pooled funds from clients, putting the
capital to work different investments including
stocks, bonds, real estate, master limited
partnerships, and more.
► Along with high-net-worth individual portfolios,
AMCs manage hedge funds and pension plans,
and—to better serve smaller investors—create
pooled structures such as mutual funds, index
funds, or exchange-traded funds, which they can
manage in a single centralized portfolio.
 HOW AN AMC IS FORMED ?
SPONSORS Forms a trust and
► Companies have to be registered appoints a board of
under the Company’s Act, 2013. trustees
AMC is subject to the regulation of TRUSTEES Regulate the mutual
Securities And Exchange Board Of fund while adhering
India. to SEBI & AMFI

► Trustees appoint AMC as AMC Takes a call on

which fund to
investment mangers of the trust as buy/sell/hold and
per recommendation of the engages in the
buying and selling
sponsors. of securities

► The trustees and the AMC sign the CUSTODIAN Responsible for
investment management holding and
safeguarding the
agreement that contains the duties, mutual fund units
rights and functions of AMC.
REGISTRAR AND They are the record
TRANSFER keepers
AGENTS
Functions of Asset Management
Company
► Portfolio management
► Advisory services
► Exercise due diligence-
► Quarterly reports
► Compensation to affected investor
► Arrangement of approval
► It shall abide by the Code of Conduct specified
by the SEBI.
► Treating the customers fairly
► A best-endeavors obligation
Regulatory requirements
for amc
► Only SEBI registered AMCs can be appointed as
investment manager of M.f. .
► AMC must have minimum net worth of Rupees 10
crore, at all times.
► An AMC cannot be an AMC or trustee of another
mutual fund
► At least half of the member of the board of an
AMC have to be independent.
Obligations of an AMC

► Investments have to be according to the

Investment Management Agreement and SEBI
Regulations.
► The actions of its employees and associates have
to be as mandated by the trustee.
► AMCs have to submit detailed quarterly reports
on the working and performance of the mutual
funds and compliance with SEBI regulations.
► AMC have to make the necessary statutory
disclosures on portfolio, NAV and price to
investors.
RESTRICTIONS ON BUSINESS
ACTIVITIES OF AMCs
► The AMC shall not undertake any business activity
except in the nature of portfolio management
services, mgmt. and advisory services to offshore
funds etc. ,provided these activities are not in
conflict with activities of mutual fund.
► AMC shall not invest in any of its scheme unless full
disclosure of its intention to invest has been made
in the offer document.
► AMC shall not act as a trustee of any mutual
funds.
How does an AMC manage
the funds?

► Asset Allocation
► Research and Analysis
► Portfolio Construction
► Performance Review
  
Role of SEBI & AMFI in AMC
Operations
► An Asset Management Firm acts under the supervision of the
board of trustees. But they are answerable to India’s capital
market regulator, Securities and Exchange Board of India
(SEBI). The Association of Mutual Funds in India (AMFI) is
another statutory body that addresses investors’ grievances .
Every fund house must comply with the set of risk
management guidelines by SEBI and AMFI.

► While SEBI is a government body, mutual fund companies

themselves formed the AMFI. Together, they strive to keep the
functioning of the industry ethic-driven and transparent. RBI
also plays an important role in regulating AMCs, if a bank is
one of the sponsors. Finally, the Ministry of Finance works as
the authority for all these regulators.
 Are fund houses as reliable as
Banks?
► There is a widespread notion that mutual funds are not as safe
as bank accounts or schemes offered by banks. People fear
that AMCs can get shut down any time. This is because banks
are visible to all and regulated by RBI. However, people often
overlook the fact that mutual fund companies too are under
the purview of RBI and finance ministry and hence quite safe.
► The sponsor or the trustees appoint an AMC for managing the
pool of funds. The AMC charges a fee and acts under the
supervision of the trustees, who are in turn regulated by SEBI.
The primary reason for this is to ensure objectivity and
transparency. So, you can go ahead and invest your money
in mutual funds to build long-term wealth while saving on
taxes.
 EXAMPLES OF AMCs

► ICICI Prudential Mutual Funds

► HDFC Mutual Funds
► Reliance Mutual Fund
► Aditya Birla Sun Life Mutual Fund
► SBI Mutual Fund
► UTI Mutual Fund
► Kotak Mahindra Mutual Fund
THANK YOU