Mutual fund houses had cheered news that UK Sinha, a man from the MF industry, could be the next Securities and Exchange Board of India (SEBI) chief. But CNBC-TV18’s Mitra Joshi and Gopika Gopakumar report that this appointment may not mean the end of their problems.
Hit by redemptions, dwindling assets-under-management, and a drop in folios, the mutual fund industry has been clamouring for a lifting on the ban on entry loads. It says only around one percent of the country's population invests in mutual funds and easier norms are needed, if deeper penetration is to be achieved.
HN Sinor, CEO, AMFI said, “Perhaps, this series of changes that have come about, I think it has in a way disrupted the industry. The industry could not really settle down to many of the quick changes which have come about. Ultimately, the industry has to have an orderly growth and for that we need to have proper careful regulation.”
So when UK Sinha's name did the rounds as SEBI Chief CB Bhave's possible successor, fund houses were happy. They hoped that given Sinha's MF background, SEBI would look kindly on a proposal to review the ban on entry load, among other regulatory changes. But this may be easier said than done.
KN Vaidyanathan, ED, SEBI said, “If you ask me, it is a closed chapter. It is decisively in the favour of the investor. It has brought transparency. It has improved AMC profitability.”
SEBI has also made it clear that the regulation of mutual fund distributors will happen over a period of time. This includes mandatory examinations to qualify as an impaneled and authorised distributor.
Source: http://www.moneycontrol.com/news/mf-news/mfs-looking-for-easingentry-load-ban-_518975.html
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