Nifty to reclaim 18300 or bears to drag index below 18000? 5 things to know before share market opening bell Indian benchmark indices are likely to open in red amid weak global cues, hinted SGX Nifty. Nifty futures on the Singapore Exchange traded 60 pts lower at 18,088, signaling that Dalal Street is headed for a negative start. In the previous session, BSE Sensex rallied 361 pts to 60,927, while NSE Nifty 50 gained 118 pts to 18,132. “Recovery in the global indices, especially in the US, is offering the respite in absence of any major domestic trigger. The recent buoyancy in the banking pack combined with a recovery in the select index majors is encouraging however Nifty has multiple hurdles to cross before resuming the uptrend. We thus reiterate our view to focus on stock-specific opportunities and maintaining positions on both sides,” said Ajit Mishra, VP – Technical Research, Religare Broking Ltd.5 things to know before share market opens Global market watch: Asia-Pacific markets mostly fell after Wall Street’s losses overnight as investors weighed headwinds for the economy in 2023. Hong Kong’s Hang Seng index added 2.43%. In mainland China, the Shanghai Composite dropped fractionally. South Korea’s Kospi fell 2.01%, and Japan’s Nikkei 225 was down 0.59%. Over in the US, the Dow Jones Industrial Average rose 0.11%, the S&P 500 lost 0.40%, and the Nasdaq Composite dropped 1.38%. Levels to watch: Volume profile indicates Nifty may find strong support around 17900-18000 zone. Coming to the OI Data, on the call side, the highest OI observed at 18200 followed by 18300 strike price while on the put side, the highest OI was at 18000 strike price. On the other hand, Bank Nifty has support at 42300-42400 while resistance is placed at 43500-43600 range,” said Ameya Ranadive, Equity Research Analyst, Choice Broking. FII and DII data: Foreign institutional investors (FIIs) sold shares worth Rs 867.65 crore, while domestic institutional investors (DIIs) purchased equities worth Rs 621.81 crore on Tuesday, 27 December, according to the provisional data available on the NSE. Stocks under F&O ban on NSE: The National Stock Exchange has Balrampur Chini Mills, Indiabulls Housing Finance, and Punjab National Bank stocks under its F&O ban list for 28 December. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95% of the market-wide position limit.
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In its consultation paper, Sebi has suggested that trustees of mutual funds should focus on market abuse by AMC, its employees and mis-selling by the AMC to increase the asset base.
Also, trustees should be responsible for fairness of fees and expenses charged by the AMC, compare its performance with peers and ensure that AMC’s sponsor is not getting any undue advantage.
In addition to the core areas, the trustees should be responsible for periodically reviewing the steps taken by AMCs for the folios which do not contain all KYC attributes with bank details.
Further, Sebi has suggested that trustees and their resource persons should independently evaluate the extent of compliance by AMC and not merely rely on AMC’s assurances.
To facilitate trustees’ supervision, AMCs should provide them with analytical information.
Presently, the trustees primarily rely on the AMCs for ensuring compliance with the applicable rules.
Under the rules, trustees hold the property of the mutual fund in trust for the benefit of the unitholders. The trustees appoint an AMC to float schemes for the mutual fund and manage the funds mobilised under various schemes, in accordance with the investment objectives.
“In view of the increasing scale and reach of the mutual fund industry, trustees’ role in respect of unitholders’ protection assumes even greater significance,” Sebi said on Friday.
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Over the past decade there has been a five-fold increase in the size of the mutual fund industry. The assets under management (AUM) has surged from Rs 7.93 lakh crore in November 2012 to Rs 39.89 lakh crore in December 2022.
To ensure that trustees devote time and attention to their core responsibilities, Sebi has suggested that for fulfilling other responsibilities, trustees may rely on professional firms such as audit firms, legal firms, merchant bankers for carrying out due diligence on their behalf.
The Sebi also listed some duties trustees can delegate to AMCs. This include ensuring that all systems are in place prior to the launch of any scheme by the AMC, and calculating any income in the mutual fund due to the fund and any income received in the mutual fund for unitholders.
The regulator has proposed to provide a one year time to existing trustees with board of trustee structure to convert into a trustee company, from governance point of view.
Presently, two structures for trustees are permitted — corporate and board of trustees structure. Moreover, there are a few mutual funds which have the board of trustees structure while the trustees of all other mutual funds have adopted the structure of a trustee company.
Considering the enhanced role of trustees over the period of time, Sebi has suggested to increase the minimum number of trustees to adequately perform their functions. Presently, the minimum number of trustees prescribed is four.
Also, it has been proposed that the chairperson of the trustee company should be an independent director.
Sebi has suggested that apart from the meeting of the audit committee of AMCs and trustees (which mostly comprises of independent directors), the board of AMCs and the board of trustees may be mandated to meet at least once a year to discuss the issues concerning the mutual funds.
The regulator proposed that the existing MF Regulations on AMC and its obligations may be amended to include additional clauses with respect to the obligations of the board of AMC.
The proposed amendment may include a clause which casts an obligation on the board of AMC to ensure that all the activities of the asset management company are in accordance with the provisions of these regulations.
The Securities and Exchange Board of India (Sebi) has sought comments from public till February 24 on these proposals.