What are Asset Management Companies (AMCs)?

CalendarToday
timer
1 min read
What are Asset Management Companies (AMCs)? Blog Image

Overview:

Capital markets regulator the Securities and Exchange Board of India (SEBI) recently proposed that asset management companies (AMCs) should set up surveillance and internal control systems for the deterrence of possible market abuse and fraudulent transactions.

About Asset Management Companies (AMCs):

  • It is a firm that invests the funds pooled from individual investors in securities with the objective of optimal return for investors in exchange for a fee.
  • AMC maintains the diversity of portfolio by investing in both high-risk and low-risk securities such as stock, debt, real- estate, shares, bonds, pension funds, etc.
  • Because they have a larger pool of resources than the individual investor could access on their own, AMCs provide investors with more diversification and investing options. 
  • AMCs are colloquially referred to as money managers or money management firms.
  • Those that offer public mutual funds or ETFs are also known as investment companies or mutual fund companies. 
  • SEBI is the Indian Capital Market Regulator which governs and controls every AMC in India.

 


Q1) What is a mutual fund?

A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds.

Source: SEBI proposes surveillance system by MFs to check frauds