Axis AMC and Axis MF Trustee Pay Rs16.57 Lakh to Settle Charges of Levying TER to AMC Books
Moneylife Digital Team 27 November 2024
Axis Asset Management Company (AMC) Ltd and Axis Mutual Fund Trustee Ltd have paid Rs16.57 lakh to market Regulator Securities and Exchange Board of India (SEBI) to settle charges of charging the total expense ratio (TER) to AMC books. 
 
SEBI had initiated adjudication proceedings against these two for alleged violations of the SEBI Act and the SEBI (Mutual Funds) Regulations, 1996. 
 
Adjudicating Officer (AO) Barnali Mukherjee was appointed to inquire into the matter under Sections 15E and 15HB of the SEBI Act. On 22 March 2024, SEBI issued a show cause notice (SCN) to the two companies.  
 
The SCN was issued to Axis Asset Management Company for allegedly incurring excessive expenses in a mutual fund scheme, which is said to have violated Clause A(1) of the SEBI Circular of 22 October 2018. Axis Mutual Fund Trustee was also accused of failing to ensure that Axis AMC complied with the SEBI circular, resulting in a violation of Regulation 18(9) read with Regulation 77 of the SEBI (Mutual Funds) Regulations, 1996.
 
As the adjudication proceedings were underway, both Axis AMC and Axis MF Trustee filed settlement applications in line with the SEBI (Settlement Proceedings) Regulations, 2018. 
 
The settlement process involved discussions with SEBI’s internal committee, and a meeting was held on 8 August 2024 between Axis AMC and Axis MF Trustee and the regulator. Following this, Axis AMC and Axis MF Trustee proposed revised settlement terms through an email sent on 23 August 2024.
 
After reviewing the revised settlement terms, the high-powered advisory committee (HPAC) of SEBI recommended that the applicants settle the case for a payment of Rs 16.57 lakh. This recommendation was approved by SEBI’s panel of whole-time members (WTM) on 6 November 2024 and communicated to the applicants on 13 November 2024.
 
On 21 November 2024, Axis AMC and Axis MF Trustee confirmed the remittance of the settlement amount. After receiving the settlement amount received, SEBI disposed of the adjudication proceedings initiated against Axis AMC and Axis MF Trustee. 
 
However, the AO clarifies that SEBI retains the right to take enforcement action if it is discovered that Axis AMC and Axis MF Trustee have not made a full and true disclosure, or if they violate any of the undertakings or waivers related to the settlement.
 
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