"Stewardship Responsibilities of institutional investors are intended to protect their clients' wealth" "by enhancing monitoring and engagement with their investee companies". This circular codifies these responsibilities for all Mutual Funds and Alternative Investment Funds.
| Focus: |
Governance |
| Publishing date: |
December 2019 |
| Effective from: |
1 April 2020 |
| Version: |
Final |
| Voluntary / Mandatory: |
Mandatory |
Relevance to investor:
"Such increased engagement is seen as an important step towards improved corporate governance in the investee companies and gives a greater fillip to the protection of the interest of investors in such companies."
Predecessor policies / frameworks:
Principles on voting for Mutual Funds through Circulars dated March 15, 2010 and March 24, 2014
Objectives:
Stewardship Code for all Mutual Funds and all categories of AIFs, in relation to their investment in listed equities
Institution behind the policy / framework:
Securities and Exchange Board of India (SEBI), GoI
Target users:
- Mutual Funds
- Alternative Investment Funds
- Asset Management Companies (AMCs)
- Trustee Companies
- Boards of Trustees of Mutual Funds
Components of the policy / framework:
|
Principle 1: Institutional Investors should formulate a comprehensive policy on the discharge of their stewardship responsibilities, publicly disclose it, review and update it periodically.
Principle 2: Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.
Principle 3: Institutional investors should monitor their investee companies.
Principle 4: Institutional investors should have a clear policy on intervention in their investee companies. Institutional investors should also have a clear policy for collaboration with other institutional investors where required, to preserve the interests of the ultimate investors, which should be disclosed
Principle 5: Institutional investors should have a clear policy on voting and disclosure of voting activity.
Principle 6: Institutional investors should report periodically on their stewardship activities.
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Stewardship Code - 6 Principles |
View Policy
