Circular on Risk Management Framework (RMF) for Mutual Funds (dated – 27.09.2021) – SEBI
View PdfCircular on Risk Management Framework (RMF) for Mutual Funds (dated – 27.09.2021) – SEBI
- With the overall objective of management of key risks involved in mutual fund operation, the revised Risk Management Framework (RMF) shall provide a set of principles or standards, which inter alia comprise the policies, procedures, risk management functions and roles & responsibilities of the management, the Board of AMC and the Board of Trustees.
- The detailed RMF for mutual funds refer attachment for Annexure – A.
- The elements of RMF, wherever applicable, have been segregated into ‘mandatory elements’ which should be implemented by the AMCs and ‘recommendatory elements’ which address other leading industry practices that can be considered for implementation by the AMCs, to the extent relevant to them.
- AMCs shall perform a self-assessment of their RMF and practices and submit a report, thereon, to their Board along with the roadmap for implementation of the framework. The aforesaid exercise must be completed and the necessary systems must be in place at the AMCs to enable compliance with the provisions of this circular with effect from January 01, 2022.
- The Circular No. MFD/CIR/15/19133/2002, dated September 30, 2002 on “Risk Management System” shall be rescinded with effect from January 01, 2022. However, AMCs may choose to adopt the provisions of this circular before the effective date.
- Compliance with the RMF should be reviewed annually by the AMC. Reports of such reviews shall be placed before the Board of AMC and Trustees for their consideration and appropriate directions, if any. Trustees may forward the findings and steps taken to mitigate the risk along with their comments to SEBI in the half-yearly trustee reports. ETC.,
