SEBI vide its circular dated December 24, 20191 has in order to enhance the corporate governance and to give a greater fillip to the protection of the interest of investors, has mandated all mutual funds and all categories of AIFs to formulate a stewardship code in relation to their investment in listed equities.

SEBI has laid down the following principles while formulating the stewardship code:

  • Institutional Investors should formulate a comprehensive policy on the discharge of their stewardship responsibilities, publicly disclose it, review and update it periodically;
  • Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it;
  • Institutional investors should monitor their investee companies;
  • Institutional investors should have a clear policy on intervention in their investee companies. Institutional investors should also have a clear policy for collaboration with other institutional investors where required, to preserve the interests of the ultimate investors, which should be disclosed;
  • Institutional investors should have a clear policy on voting and disclosure of voting activity;
  • Institutional investors should report periodically on their stewardship activities.

The Stewardship Code shall come into effect from the financial year beginning April 01, 2020.


1 Bearing number CIR/CFD/CMD1/ 168 /2019.

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