Market regulator Sebi has found large-scale violations in several schemes of select mutual fund houses where norms regarding minimum 20 investors and maximum 25 per cent single investor exposure have been breached repeatedly.
These fund houses have been asked by Sebi to immediately take redressal measures, failing which penal actions can be taken, a senior official said.
Industry executives have also confirmed such directions from Sebi.
Without naming the concerned mutual funds, the official said the violations have come to fore after an analysis of quarterly disclosures made by fund houses about their schemes.
As per the norms, every mutual fund scheme needs to have a minimum of 20 investors, while one single investor can not account for more than 25 per cent of total assets managed by that scheme.
Sebi found that many schemes have been repeatedly breaching these norms, especially during the course of a quarter. Some investors put large amount of money in a scheme and withdraw the same at a later stage to meet quarter-end norms, while many schemes were non-compliant on full quarter basis as well.
Sebi's analysis has put forth repeat offenders in many cases, where same investor was breaching these '20-25' norms repeatedly.
The concerned fund houses have also been asked to put in place necessary mechanism to immediately identify such violations in the future. Industry body AMFI has also been asked to get into the matter and do the needful.
Currently, there are about 45 fund houses in the country, which together manage assets worth over Rs 9 lakh crore.
Sebi, recently, issued strict disclosure norms for mutual funds. They have been asked to make monthly disclosures about assets managed by them and explain the rationale behind exercising their voting rights in companies, among others.
Mutual funds are required to make the disclosures on their websites and share the same with Association of Mutual Funds of India (AMFI) within 7 working days from end of the month.
These disclosure would also be available on AMFI's website.
As per the new norms, mutual funds will have to disclose details with respect to Asset Under Management (AUM) from different categories of schemes, AUM from places beyond top-15 cities, contribution of sponsor and its associates in AUM, contribution from different types of investors (retail, corporate etc), state-wise contribution and AUM from sponsor/non-sponsor group distributors.
Besides, the fund houses would have to make disclosure of votes cast on their