SEBI has issued additional guidelines for votes cast by mutual funds/AMCs. With effect from 1 April 2021, mutual funds, including their passive investment schemes like index funds and exchange traded funds shall compulsorily cast their votes in respect of the following resolutions :

• All the matters mentioned in circular dated 15 March 2010 such as corporate governance, changes in capital structure, appointment/removal of directors, stock option plans, social and corporate responsibility issues, any other issue that may affect the interest of the unit holders;
• Related party transactions of the investee companies (excluding own group companies). The meaning of Related Party Transactions shall be as defined under the LODR Regulations, 2015.

For all other resolutions, mutual funds are required to compulsorily cast their votes from 1 April, 2022. However, Mutual Funds will be exempted from casting votes if they have no economic interests on the day of voting.

Fund Managers/Decision makers are required to submit a declaration to the Trustees, on a quarterly basis, that the votes cast by them have not been influenced by any factor other than the best interest of the unit holders. Trustees in turn will confirm the same to SEBI in their Half Yearly Trustee Report.

To refer to the circular dated 5 March 2021, click here.