SBICAP, Groww Asset Management Pay over Rs34 Lakh To Settle Regulatory Violations with SEBI
Moneylife Digital Team 09 July 2024
The Securities and Exchange Board of India (SEBI) has recently concluded settlement agreements with two mutual funds over alleged regulatory infractions: SBICAP Trustee Company Ltd and Groww Asset Management Ltd.
SBICAP Trustee Company, a subsidiary of SBI Capital Markets Ltd, faced allegations of violating debenture trustee regulations. The company was accused of inadequately disclosing information regarding a 'recovery expense fund' and interest or redemption schedules on its website. Additionally, SEBI highlighted improper disclosures related to asset cover certificates. SBICAP agreed to pay Rs25.08 lakh to settle these proceedings without admitting or denying SEBI's findings.
In a separate case, Groww Asset Management (formerly Indiabulls Asset Management Company Ltd) and Groww Trustee Ltd settled allegations of regulatory violations by paying Rs9 lakh. The violations pertained to April 2020 to March 2022, during which certain scheme-related expenses were allegedly not paid from the schemes as required by SEBI regulations. Instead, these expenses were borne by the asset management company (AMC), contravening SEBI's stipulation that all such expenses, including distributor commissions, must be exclusively funded through the scheme within regulatory limits.
Both settlements were facilitated under section 15JB of the SEBI Act and Regulation 23(1) of the Settlement Regulations which allow SEBI to dispose adjudication proceedings through settlement. The process involved discussions between the companies and SEBI's internal committees to determine appropriate settlement terms. 
With the settlement amounts paid and confirmed by SEBI, both SBICAP Trustee and Groww entities are now protected from further enforcement actions related to these specific violations. 
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