The Sebi norms came into play after Life Insurance Corp of India (LIC) took over IDBI Bank in January 2019. While IDBI Bank is the sponsor to IDBI Mutual Fund, LIC has its own fund house, LIC Mutual Fund.
IDBI Bank-promoted IDBI Mutual Fund has signed an agreement with LIC Mutual Fund to transfer its schemes to the latter, the bank said in an exchange filing on Friday. The decision has been taken to comply with the Section 7B of Securities and Exchange Board of India’s (SEBI) Mutual Fund Regulations, the filing said.
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According to these regulations, the sponsor of a mutual fund and the asset management company of the mutual fund cannot individually, collectively, directly or indirectly hold more than 10% of the shareholding or voting rights in another asset management company or trustee company. In the event of a merger or an acquisition, sponsors of fund houses have one year to comply with the norms.
The Sebi norms came into play after Life Insurance Corp of India (LIC) took over IDBI Bank in January 2019. While IDBI Bank is the sponsor to IDBI Mutual Fund, LIC has its own fund house, LIC Mutual Fund. As on September 30, LIC holds a 49.24% stake in IDBI Bank.
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IDBI Mutual Fund has a total of 22 schemes as on November 30. Its average assets under management was Rs 3,761.4 crore and LIC Mutual Fund’s average assets stood at Rs 17,879 crore in July-September.
