An Asset Management Company (AMC) is essentially the mutual fund company, which is appointed by the sponsor or the trustees. It invests the funds collected by its mutual fund schemes in securities as specified by the investment objective of each particular scheme. Here is a quick look at what an AMC does:
An AMC acts under the supervision of the board of trustees and is primarily regulated by the Securities and Exchange Board of India (SEBI). Apart from SEBI, the Association of Mutual Funds in India (AMFI), formed by the association of SEBI registered AMCs, recommends best practices and oversees the functioning of the mutual fund industry. RBI also plays an important role in regulating AMC if the sponsors are backed by a bank.
The Ministry of Finance works as the appellate authority for all the regulations stipulated by these regulators. Here is quick look at some regulations that govern AMCs: