Invesco AMC, its CEO, others settle case with Sebi

Following its inspection and based on its findings, Sebi issued show-cause notices to the fund house and its trustees on August 9, 2023.

"That there was no clear segregation of activities and Chinese wall between Portfolio Management activities and Mutual Fund activities of IAMI (Invesco Asset Management India)," Sebi alleged in its show cause notice.

"There was no adequate infrastructure, or manpower available with the portfolio manager for effectively discharging the activities of a portfolio manager. PMS arm of IAMI had not maintained an arms-length relationship with Invesco Mutual Fund arm by clearly segregating its activities as a portfolio manager/investment adviser from Mutual Fund Activity," Sebi said.

The regulator further said: "That inter scheme transfers were executed and there were movements of securities / pre-arranged trades /layered trades between schemes of Invesco MF and PMS Advisory in violation of the provisions of SEBI (Mutual Funds) Regulations and it is alleged that the said scheme of things is 'unfair trade practice'."

Invesco Asset Management and its key managerial personnel failed to ensure that investments are done to achieve the objectives of the scheme by applying independent business judgment and in the interest of the unitholders in certain investments, Sebi said in its settlement order on Wednesday.

On October 7, Sebi received six settlement applications to settle the securities violation case.

Sebi's independent advisory committees suggested settling the case subject to an undertaking by Invesco Asset Management and five others that systems are in place to prevent the recurrence of similar lapses.

The regulator also asked them to submit an undertaking that the settlement amount should not be borne by the investors.