The troubles of mutual fund company HSBC Asset Management have increased. Market regulator SEBI has not only reopened an old case against it, but has also imposed a penalty of Rs 5 lakh on it.
SEBI reopened the case
The market regulator had earlier issued an order in the related case, but now it says that the order to restore the rights of the asset management company in the old order is erroneous. The regulator has re-opened the case to correct the mistake of the previous order and imposed a penalty of Rs 5 lakh on the company.
Acquisition case of L&T AMC
This action of SEBI is related to the acquisition of L&T Asset Management Company by HSBC Group. HSBC Group acquired L&T Asset Management Company in May last year and merged it with its asset management company HSBC AMC in October 2023.
This provision has been violated
As per the existing rules, asset management companies have to maintain records proving all investment decisions. Those records include data, facts and opinions responsible for making the decision. This means that asset management companies have to maintain records of the data, facts and opinions on the basis of which they take investment decisions. Irregularities related to this provision have been found in the case of acquisition of L&T AMC by HSBC AMC.
The matter was over last year
SEBI had issued a fresh show cause notice in the matter on 6 November 2023. Earlier in an order dated August 23 last year, SEBI had closed the case against HSBC Asset Management Company, saying that the allegations against it were not proved. However, now that order has been reversed and a penalty has been imposed on the company.
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