The Securities and Exchange Board of India (Sebi) on Monday proposed relaxations for asset management companies (AMCs) to serve pooled non-broad-based funds, giving an opportunity to fund houses to expand their business.

Photograph: Francis Mascarenhas/Reuters

The proposed relaxations of the MF regulations come along with several guardrails to address conflict of interest situations and ring-fencing.

Additionally, the market regulator has also proposed AMCs and its subsidiaries to undertake activities which are ancillary to its core fund management operations such as distribution and marketing services.

AMCs will be able to act as global distributor to funds which are managed or advised by the AMC or its subsidiaries.

Further, they will be able to act as point of presence for pension funds according to norms by Pension Fund Regulatory and Development Authority (PFRDA).

“AMC may provide management and advisory services to pooled non-broad based funds irrespective of the route through which the foreign entity chooses to invest in India,” said Sebi.

Pooled non-broad-based funds may be allowed to have less than 20 investors.

Till now, AMCs which wanted to provide management and advisory services to non-broad based funds need to obtain a PMS licence.

Regulation 24(b) of MF Regulations restricts AMCs from undertaking any business activity other than in the nature of management and advisory services provided to pooled assets, including offshore funds, insurance funds, pension funds, provident funds, or such categories of foreign portfolio investor.

AMCs will be required to ensure that resources dedicated to pooled non-broad-based funds should be proportionate to the fee earned from such funds through investors and that the MF investors are not made to bear the cost of such products.

Further, Sebi may impose a cap on the fee charged by the AMCs for management and advisory to pooled non-broad based funds or an upper limit to the maximum permissible difference between fees from similar broad-based mutual fund schemes and pooled non-broad-based funds.

The key team members in the investment decision making and fund management will also have to be segregated.

However, the fund manager may be common only if the investment objectives and asset allocation are same and replicated across all the funds managed by the fund manager.

“Pooled non-broad-based funds, to which management and advisory service is provided by AMCs, shall be required to be appropriately regulated i.e. either domestically or in foreign jurisdictions,” said Sebi.

ABSL AIF secures Rs 700 cr first close of credit fund

Aditya Birla Sun Life Asset Management Company (ABSL AMC) has announced the first close of its  Structured Opportunities Fund – Series II, raising commitments totalling Rs 700 crore.

This marks a significant milestone for the Category II Alternative Investment Fund.

The fund, targeting a final corpus of Rs 1,250 crore, also holds a green- shoe option allowing it to raise an additional Rs 1,250 crore.

This positions it for a potential total mobilisation of up to Rs 2,500 crore, underscoring ambitious plans for the private credit space.

Managed by Amit Kansal, Head of Alternate Investments – Fixed Income at ABSLAMC, the fund focuses on providing bespoke structured credit solutions to mid-to-large corporates.