Sebi tightens mutual fund sponsor disclosure norms

Mumbai: The Securities and Exchange Board of India (Sebi) is seeking extensive disclosures from sponsors looking to set up mutual funds, including details of ownership, ultimate beneficial owners, financial strength, regulatory history and governance practices, as the regulator consolidates the registration process into a single application form.The revised application form issued on Monday, follows the overhaul of the Sebi (Mutual Funds) Regulations, 2026, and the Sebi Intermediaries Regulations.At present, applications for mutual fund registration are processed in two stages: in-principle approval to a sponsor for setting up a mutual fund, followed by final registration of the mutual fund.The regulator has merged the existing forms for mutual fund registration into a single application form while retaining the two-stage process of in-principle approval followed by final registration.Under the new format, sponsors will have to provide their shareholding pattern, identify ultimate beneficial owners, disclose their capital structure and state the proposed contribution to the asset management company (AMC), both in absolute terms and as a percentage of shareholding.They will also have to submit their latest auditor-certified net worth certificate, along with audited balance sheets and profit-and-loss accounts for the preceding five financial years.Sponsors will also have to demonstrate compliance with the eligibility criteria prescribed under Sebi norms.Under one route, they must have at least five years of experience in financial services, a positive net worth in each of the preceding five years, and profitability from the financial services business during that period. Their average annual net profit from financial services must also be at least ₹10 crore over the preceding five years. Under the alternative route, the AMC must have a net worth of at least ₹150 crore at the time of registration, to be infused by the sponsor.