A report by the Asian Development Bank on worldwide use of third-party trustee services has captured India's imagination. Indian securities regulators are studying a proposal to appoint independent trustees to the boards of mutual funds, according to Business Standard. Foreign securities regulators are moving ahead of their U.S. counterparts in weighing stricter measures to control widespread malfeasance among asset managers by intertwining new forms of government oversight with the management of private financial services businesses. The proposed changes in India stem from a report prepared by the Asian Development Bank, which partially based its suggestions on a practice in the United Kingdom and other countries of bringing in outside trustee companies to help oversee mutual fund families. Third-party trustee specialists typically rely on a team of lawyers, auditors and management specialists who are presumably qualified to advocate shareholders' interests. The strategy also ensures that the board is truly independent from management's interests.
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