Axis Asset Management Company Limited and Axis Mutual Fund Trustee Limited have entered a settlement with the market regulator SEBI.
The regulator had alleged violations related to the practice of charging Total Expense Ratio to Asset Management Company books. The settlement, which amounts to over Rs. 16 lakhs resolves the issue without the companies admitting to or denying the charges.
The issue came to light when SEBI initiated proceedings against the two companies this year for allegedly violating regulations under the SEBI Act and the SEBI (Mutual Funds) Regulations, 1996.
Axis Asset Management was accused of incurring excess charges on mutual fund schemes. Meanwhile, Axis Mutual Fund Trustee was charged for failing to ensure compliance with the same regulations.
To resolve the issue at hand, the two companies filed settlement applications with SEBI in June 2024, proposing to settle the case without admitting or denying the allegations. Following a review of their settlement proposal, the High Powered Advisory Committee (HPAC) recommended a settlement amount.
This recommendation was approved by SEBI's Panel of Whole Time Members on Nov 6, 2024. The companies confirmed payment of the settlement amount on Nov 21, 2024.
While the settlement brings an end to the adjudication proceedings, it comes with the understanding that SEBI retains the right to take further enforcement action should any issues arise, such as non-disclosure or a breach of the settlement terms.
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