Fund Managers or the Asset Management Company (amc)

The role of fund managers is highly significant in the mutual fund operations. So far, this role is being played by the Mutual Funds through the subsidiary company of the sponsoring bank or inside the banks through department or division. Under the Guidelines, fund managers will have to be a separate company specialized and skilled in the investment activities.

AMC has to discharge mainly three functions as given below:

Taking investment decisions and making investments of the funds through market dealer/brokers in the secondary market securities or directly in the primary capital market or money market instruments;

Realize fund position by taking account of all receivables and realizations, moving corporate actions involving declaration of dividends, etc. to compensate investors for their investments in units; and

Maintaining proper accounting and information for pricing the units and arriving at Net Assets Value (NAV), the information about the listed schemes and the transactions of units in the secondary market. AMC has to give feedback to the trustees about its fund management operations and maintain a perfect information system.