Groww's AMC settles SEBI case with Rs 9 lakh payment
Groww Asset Management violated SEBI rules by paying scheme expenses from AMC funds between April 2020 and March 2022.
Groww Asset Management Ltd (formerly Indiabulls Asset Management Company Ltd) and its trustee have settled with markets watchdog SEBI a case pertaining to an alleged violation of regulatory norms after paying Rs 9 lakh.
This came after the applicants—Groww Asset Management Company and Groww Trustee Ltd (earlier Indiabulls Trustee Company Ltd)—proposed to settle the alleged violation by "neither admitting nor denying the findings of fact".
"It is hereby ordered that any proceedings that maybe initiated for the violations...are settled in respect of the applicants," the Securities and Exchange Board of India (SEBI) said in its settlement order passed on June 28.
The applicants have submitted that on account of the change in control of Indiabulls Asset Management Company and Indiabulls Trustee due to the acquisition of these entities by Nextbillion Technology Pvt Ltd, the entities are now known as Groww Asset Management and Trustee with effect from May 3, 2023.
In the settlement application, the applicants stated that from April 2020 to March 2022, certain scheme-related expenses were paid by the AMC and were not paid from the schemes. This resulted in the AMC bearing the expenses towards running their schemes thereby violating SEBI's rule.
The SEBI's rule mandates that all scheme-related expenses, including commission paid to distributors, need to necessarily be paid from the scheme only within the regulatory limits and not from the books of the AMC, its associate, sponsor, trustee or any other entity through any route.
Edited by Suman Singh