Source: ET
Context:
Master Capital Services Limited, a wholly-owned subsidiary of Master Trust, has received SEBI’s in-principle approval to enter the mutual fund business.
What “In-Principle Approval” Means
- It is a preliminary approval granted by SEBI.
- Allows the applicant to begin preparatory work such as setting up systems, hiring key personnel, meeting compliance standards, and filing scheme documents.
- The company must then apply for final registration under SEBI (Mutual Funds) Regulations, 1996.
- Only after final approval can they formally launch mutual fund schemes and start collecting money from investors.
Why This Is Significant
- Master Trust is a known broking and financial services group; entering the mutual fund space expands its presence into asset management.
- The MF industry is growing rapidly with increasing retail SIP participation.
- New entrants bring more competition, innovation, and product diversity for investors.
Regulatory Requirements to Start a Mutual Fund
Under SEBI MF Regulations, an applicant must:
- Have a sponsor with a sound track record and positive net worth.
- Set up an Asset Management Company (AMC) and a Trustee Company.
- Maintain minimum net worth of ₹50 crore for the AMC.
- Comply with fit and proper criteria, governance standards, and risk-management systems.
- Meet infrastructure, compliance, and technology benchmarks.
