Sebi settles proceedings against JP Morgan MF

Markets regulator Sebi has settled proceedings against JP Morgan Mutual Fund (MF) and two other related entities after they agreed to pay a total of about Rs 2.75 crore and voluntarily accepted not to issue new schemes for one year.

The adjudication proceedings pertain to JP Morgan MF launching a scheme after the expiry of the “right to launch” deadline in 2014.

Sebi issued a show cause notice to the fund house along with the JP Morgan Asset Management India (the AMC) and JP Morgan Mutual Fund India (the trustee) for failing to comply with certain provisions of MF regulations while launching ‘JP Morgan India Fixed Maturity Plan - Series 39’.

Though the validity of the SID (scheme information document) was only till August 12, 2014, the AMC launched the scheme on August 19, 2014 without filing a fresh SID along with the fee, which was required under regulations.

The scheme was launched when the “right to launch the said scheme had already expired.” Further, the “offer document contained misleading and incorrect scheme name and information and even the units that were allotted to the investors were under the incorrect scheme name,” the regulator noted.

The AMC filed a copy of the SID without mentioning the opening and closing date of the NFO (new fund offer), which was against norms, it said. J P Morgan MF proposed payment of Rs 91.8 lakh and also “voluntary debarment from issuing of new schemes for a period of one year from the date of consent order” towards full and final settlement of all regulatory, civil or criminal proceedings without admitting or denying any violation. Each of the three entities paid Rs 91.8 lakh to the regulator, according to three separate but similarly worded settlement orders passed by Sebi.

These entities paid the settlement amounts in February and the orders were passed by Sebi’s Adjudicating Officer Suresh B Menon.

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