SEBI has asked Asset Management Companies (AMCs) to form audit committees which will be responsible for oversight of financial reporting process, audit process, company’s system of internal controls, compliance with laws and regulations and other related process, with specific reference to operation of its Mutual Fund business. The circular will come into force with effect from August 1, 2022. Currently, audit committee exists at the level of trustees of mutual funds. The decision has been taken after taking into account the recommendation of Mutual Fund Advisory Committee and the feedback received from the industry and has come out with detailed outline for role, responsibility, membership and other features of the Audit Committee of AMC. The Audit Committee of the AMC shall be responsible for oversight of financial reporting process, audit process, company’s system of internal controls, compliance to laws and regulations and other related process, with specific reference to operation of its Mutual Fund business. The Audit committee will consist of minimum three members from the Board of AMC out of which 2/3rd shall be independent directors. Chairperson shall be an Independent Director.

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