InvestorQ : InvestorQ-Ask,Answer & Share All About Finance!
Monali Shah made post

What is the procedure to become a trustee of an AMC?

Answer
user profile image
Neha Samdani answered.
3 weeks ago


The role of a trustee becomes critical because the mutual fund, sponsored by the AMC, actually holds money in trust on behalf of millions of investors. The trustees will ensure that the funds are actually managed in the interests of the shareholders. While the trustees will not get into the day to day management of the funds, they will set broad guidelines and compliance checkpoints to ensure that the interests of the small investors are protected.

Effectively, the trustee will spell out the responsibilities of the AMC, monitor any new scheme that is introduced, and ensure full compliance with all regulatory guidelines. The trustee can be an individual person, a member of the board of directors, a company, or a bank appointed with the approval of the SEBI.

They are trusted to make decisions in the beneficiary’s best interest.  Every mutual fund must have a minimum of 4 trustees or they can appoint a trustee company with a minimum of 4 directors. Two-thirds of the trustees will have to be independent. Also, trustees cannot be appointed from within the same group to which the AMC belongs. The Board of Trustees is appointed by the AMC and is subject to the approval of SEBI.