BackHDFC MF settles mutual fund violation case for ₹3.78 crore
Sebi's consent mechanism allows the entities to settle violations by paying a penalty without admission or denial of guilt.
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Mumbai: HDFC AMC and HDFC Trustee Company on Tuesday settled a case of alleged violation of mutual fund norms with the Securities and Exchange Board of India (Sebi) by paying ₹ 3.78 crore as settlement fee.
The so-called consent mechanism allows the entities to settle violations by paying a penalty without admission or denial of guilt.
The regulator had initiated adjudication proceedings against HDFC Asset Management Company and HDFC Trustee Company in April for alleged violations of several provisions of mutual fund regulations.
Both firms submitted separate applications with Sebi to settle the case on payment of settlement charges.
The alleged violations pertained to “maturity of a security purchased by a scheme of HDFC Mutual Fund exceeding the maturity of the scheme", said a person with direct knowledge of the matter.
The other violations by the fund house included difference in the total expense ratio (TER) for direct and regular plans being lower than the commission paid to the distributors in certain schemes. Excess charges being debited for certain years were credited after a period of more than one year, net asset value (NAV) of certain schemes not being published on HDFC Mutual Funds’ website for a certain period of time and error in valuation of unlisted equity shares of a company, said the same person. He did not wish to be identified.
Earlier in July, the regulator had also directed HDFC AMC, the country’s second largest mutual fund house, to cancel shares allotted to distributors and advisers ahead of its initial public offering.
Sebi had also asked the fund house to return the money it had collected from distributors and independent financial advisers, along with an interest rate of 12 per cent.
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