Important Note: For Mutual Fund investors who have invested in AMCs serviced by Karvy Fintech (RTA)

“Your investments managed by Karvy Fintech (RTA Service) are safe.”

Following the news of SEBI ban on Karvy Stock Broking, we noticed concerns from some users who have made mutual funds investments in fund houses (AMCs) that are serviced by Karvy Fintech RTA (Registrar and Transfer Agent). These two entities were earlier part of Karvy Group, but Karvy Fintech RTA now operates as a different entity with a completely different management and ownership structure from the Karvy Group.

We have spoken with management of Karvy Fintech; Mr. Ganesh V, Managing Director and CEO of Karvy Fintech has assured us that all services that are provided by Karvy Fintech as part of its RTA service to 23 mutual fund houses continue to run their business as usual. All investment-related information of all users is safe.

We have received the following information from the Karvy Fintech management team:

While it still carries the name as Karvy, the business now operates as a separate entity and the majority of it is owned by General Atlantic Singapore Fund Pte. Ltd., an investment vehicle of General Atlantic, a renowned growth equity firm headquartered in the US. There are no common Directors between Karvy Fintech Private Limited (KFPL) and Karvy group companies.

Karvy Fintech management has also assured us that more announcements regarding the same would follow.

They clarified as below:

• There is no direct or collateral impact to KFPL business operations with respect to the aforesaid order in the matter of Karvy Stock Broking Limited.
• KFPL performs Registrar and Transfer Agency activities as a separately registered body with SEBI.
• KFPL is a Board governed company, operates like a professionally run listed company
• KFPL Board has nominees from General Atlantic, a professional as Managing Director and CEO, a few prominent names from varied sections of the industry, as Independent Directors, including a woman Director.
• This governance structure, coupled with several Board & Management Committees, brings in the right blend of leadership skills, operational experience, BFSI domain expertise and industry veterans overseeing & guiding the businesses.
• KFPL has elaborate policies, procedures, and practices in line with the requirements of the above-mentioned SEBI circulars on technology-related matters for managing security and privacy of information or data.
• Frameworks like ISO 27001:2013 as referred in the SEBI circulars are considered in defining our security and audit frameworks and implemented by constituting of a Technology Committee comprising of KFPL Leadership team, CISO, whole time IT and Operations Heads, administrators representing Operating System, Network, Database and Security and an independent external expert with adequate experience in the area of technology in Mutual Fund industry and Pension Industry
• KFPL is certified for CMMi Level 3 for DEV & Services — Highest data security & process-driven organization
• Apart from this, KFPL also ensures concurrent audits, strong surveillance processes, etc., apart from being subjected to various external audits and checks

KFPL operates in a highly regulated environment, compliant with -
o SEBI QRTA guidelines;
o Cyber Security & Cyber Resilience framework;
o Regulatory Inspections;
o System Audits;
o Governance by Depositories, besides client-driven audits

• KFPL runs almost all its business applications in its proprietary technology
• The entire range of servers / SAN devices in the data center is exclusively owned and managed by KFPL
• Ownership of these assets cuts across both primary and secondary data centers