Notice given by HDFC Trustee Company Limited and HDFC Asset Management Company Limited. — Combination C-2014/01/149
- Case No.C-2014/01/149
Ratio decidendi
The rule this decision rests on
A combination notified under Section 6(2) of the Competition Act, 2002 may be approved under Section 31(1) where, having considered the notice and the factors listed in Section 20(4), the Commission forms the opinion that the combination is not likely to have an appreciable adverse effect on competition in India. In forming that opinion as to the market structure, the Commission reasons that where many competitors are available (here, 52 registered mutual funds), customers have ample choice, and customers can switch between providers without significant cost, the market offers no significant barrier that would allow the combination to cause an appreciable adverse effect on competition. The acquired party's share of the relevant market (here, the share of the transferred schemes in total average assets under management) being insignificant supports that conclusion.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. On 17th January, 2014, the Competition Commission of India (hereinafter referred to as the “Commission”), received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (hereinafter referred to as the “Act”), given by HDFC Trustee Company Limited (hereinafter referred to as “HDFC Trustee”) and HDFC Asset Management Company Limited (hereinafter referred to as “HDFC AMC”) (hereinafter HDFC Trustee and HDFC AMC are collectively referred to as "Acquirers").
2. The notice was filed pursuant to the execution of a Scheme Transfer Agreement (hereinafter referred to as “STA”) on 23rd December 2013 between HDFC Trustee, HDFC AMC, the Board of Trustees of Morgan Stanley Mutual Fund (hereinafter referred to as “MS Trustees”) and Morgan Stanley Investment Management Private Limited (hereinafter referred to as “MS AMC”) (hereinafter MS Trustees and MS AMC are collectively referred to as “MS Entities”). According to the STA, 8 (eight) mutual fund schemes of Morgan Stanley Mutual Fund (hereinafter referred to as “MS Mutual Fund”) inter alia including the assets, liabilities, unclaimed dividends, corpus along with trusteeship and management of these schemes, shall be transferred from MS Entities to the Acquirers.
3. The proposed combination falls under Section 5(a) of the Act.
COMPETITION COMMISSION OF INDIA Fair Competition For Greater Good
4. HDFC Mutual Fund, co-sponsored by the Housing Development Finance Corporation Limited (hereinafter referred to as “HDFC”) and Standard Life Investments Limited, is a trust established under the Indian Trusts Act, 1882. HDFC Trustee and HDFC AMC, the companies incorporated under the Companies Act, 1956 are respectively, the trustees and asset management company of the HDFC Mutual Fund. HDFC Mutual Fund is registered under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (hereinafter referred to as “Mutual Fund Regulations”).
5. MS Mutual Fund, sponsored by Morgan Stanley, is a trust established under the Indian Trusts Act, 1882. MS AMC, a company incorporated under the Companies Act, 1956 is the asset management company of MS Mutual Fund. MS Mutual Fund is registered under the Mutual Fund Regulations.
6. Mutual funds in India are primarily regulated by SEBI under the Mutual Fund Regulations. As per the information available on the website of SEBI, 52 (Fifty two) mutual funds (along with their asset management companies) are registered with SEBI. Accordingly, there appears to be ample choice available to the customers in selection of the mutual fund. Further, there also seems to be no significant barriers for the customers to switch from one mutual fund to another without incurring any significant cost. As per the quarterly report issued by the Association of Mutual Funds of India (AMFI), the total size of the market in terms of the average asset under management (AAUM) for all the mutual fund schemes in India was Rs. 876546 crore for the quarter ending December 2013. It is observed from the report that the share of the MS Mutual Fund schemes in the total AAUM for the latest quarter was insignificant.
7. Considering the facts on record and the details provided in the notice given under sub-section (2) of Section 6 of the Act and assessment of proposed
COMPETITION COMMISSION OF INDIA Fair Competition For Greater Good combination on the basis of factors stated in sub-section (4) of Section 20 of the Act, the Commission is of the opinion that the proposed combination is not likely to have appreciable adverse effect on competition in India and therefore, the Commission hereby approves the same under sub-section (1) of Section 31 of the Act.
8. This order shall stand revoked if, at any time, the information provided by the Acquirers is found to be incorrect.
9. The Secretary is directed to communicate to the Acquirers accordingly.
(Ashok Chawla) Chairperson (Geeta Gouri) Member (Anurag Goel) Member (S.N. Dhingra) Member (S.L. Bunker) Member
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free