The definition of “associate” has been removed from the mutual fund regulations by Sebi to apply to sponsors who make investments on behalf of insurance policy beneficiaries. The Securities and Exchange Board of India (Sebi) announced in a notification that the new rules would take effect on September 3.
The proposal was approved last month by the board of the regulator.
“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.
Under the rules, associate includes a person who directly or indirectly, by himself, or in combination with relatives, exercises control over the Asset Management Company (AMC) or the trustee, among others.
At present, there are 43 mutual fund houses, which together manage assets worth nearly Rs 38 lakh crore.