What is a Mutual Fund Asset Management Company (AMC)?

Mutual-Fund-Asset-Management-Company-(AMC)

Mutual Fund Asset Management Company (AMC) May be appointed/established by Mutual Fund sponsor or Trustee. The AMC looks after the day to day activity of the assets of the Mutual Funds.





Role of Mutual Fund Asset Management Company (AMC)


The AMC looks after the assets of the Mutual fund and employs manpower suitable for the job.It is responsible for establishing necessary infrastructure, like offices/branches, employ suitably skilled people, look after software for the functioning, handle promotions and sales activity and do meeting and liaison with various regulators and other service providers. The AMC has to ensure that all schemes follow the rule regulations as set by SEBI and needs to take sound financial decisions for the health of the organisation. Following guidelines/rules have to be strictly implemented by the AMS-

  • AMC director shod have sound knowledge and experience of the field.
  • Key personnel should not have been found convicted of financial crimes and should have high moral turpitude.
  • Should not have been part of a banned AMC earlier.
It is also stipulated that 50% of the directors should be independent, not related to the sponsor or trustee.The AMC should have a net worth of 50 crores while setting it up. The AMC can be terminated if found not functioning properly by a majority of the trustee or by a vote of 75% unit holders.


Appointments of the Mutual Fund Asset Management Company (AMC)


There are various appointments or workforce which perform the specific role for the smooth functioning of the AMC.It is being headed by Managing Director(MD) along with Chief Executive Officer(CEO). Following are some of the appointments/posts-

  • Chief Investment Officer(CIO)-He is responsible for overall investment functioning of the Mutual Funds. All the Mutual Fund Managers help him in this job.
  • Analysts- they carry out fundamental and technical analysis and help the Fund Manager.
  • Dealers- Help in sale and purchase activity.
  • Marketing officer- responsible for the handling of sales and distribution teams.
  • Operations officer- responsible for all the issues regarding functioning and operations of the AMC.
  • Compliance Officer-He has an important role in ensuring the compliance of rules and regulations by the AMC and he reports directly to the MD.

Conclusion


The Mutual Fund AMC is the direct link between the Mutual Fund and investors. It plays an important role in capital generation, therefore it is important to have professional people running the AMC.