Audit Committee of Asset Management Companies (AMCs)

SEBI/HO/IMD/IMD-I DOF2/P/CIR/2022/17 · 2022-02-09 · Securities and Exchange Board of India

Summary

This circular mandates that Asset Management Companies (AMCs) of mutual funds constitute an Audit Committee. It details the specific roles, membership criteria, meeting frequency, and reporting obligations for these committees. The guidelines apply to AMCs and must be implemented in addition to existing requirements under the Companies Act and SEBI LODR Regulations.

Text

the AMCs of mutual funds shall be required to constitute an Audit Committee

The Audit Committee of the AMC shall be responsible for oversight of financial reporting process, audit process, company’s system of internal controls, compliance to laws and regulations and other related process

To review the financial reporting processes, the system of internal controls and the audit processes for the Mutual Fund operations of the AMC

To ensure that the rectifications, if any, suggested by internal and external auditors, etc. are acted upon

The Audit Committee of AMC shall have minimum three directors as members

At least two-third members of the Audit Committee shall be independent directors of AMC

The Chairperson of the Committee shall be an independent director, with adequate experience in the areas of finance and financial services

atleast four meetings shall be called in a financial year and not more than one hundred and twenty days shall elapse between two meetings

The quorum for meeting shall either be two members or one third of the members of the Audit Committee, whichever is greater, with at least two independent director

The internal auditor shall submit its report to the Audit Committees of AMC and the Board of AMC

The Audit Committee of AMC shall forward their observations on internal audit report, if any, to the Trustees

Considering and recommending for approval of AMC Board, all accounting policy issues for the Schemes and the AMC

Source: SecMarx — Audit Committee of Asset Management Companies (AMCs). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.