Mutual fund companies looking for a reprieve in the form of
reintroduction of entry loads or other charges may be disappointed, as the
stock market regulator does not appear to be looking at the option in the near
term. Considering the growth in the equity mutual fund schemes in the country,
there was no need to bring back the entry load, the Securities and Exchange
Board of India (Sebi) hinted.
“In 2010-11, the net inflow in equity schemes of the mutual fund sector was down by about Rs 13,000 crore, while in 2011-12, the net inflow was higher by Rs 600-700 crore. This is an encouraging development considering that the number of mutual fund folios were down in 2011-12,” the Sebi chairman, UK Sinha, said, at a press conference here on Monday.
In 2009, Sebi banned the practice of charging entry loads on mutual fund products making the product pricing more transparent. Mutual fund companies have been asking for the reintroduction of the entry load that would make the business more viable and profitable.
Evading a direct reply on the demands by Association of Mutual Funds in India (Amfi), Sinha said, “When there has been an increase in inflows even after the number of folios have gone down, it will not be fair for Sebi to jump to conclusions.” Sebi had not received any representation from Amfi on the same, he added.
The spread of the mutual fund business has not been up to the expectation of the potential of the market and Sebi has started the process of consulting agencies and shareholders to enhance the reach of mutual funds in India, he informed. Based on the responses of various stakeholders, the capital market regulator would consider setting up a committee to develop mutual funds business in India.
Sebi, which is in discussion with the insurance regulator Irda (Insurance Regulatory and Development Authority) to frame the listing norms for general insurance companies, hopes that the regulation would be out very soon.
The regulator has issued licenses to 13 qualified depository participants (QDP) to bring in qualified foreign investors (QFI) to invest directly in Indian equity markets.
“The entities need license to canvass for business outside India and minimum assets of Rs 500 crore. We have given licenses for 13 QDP. When the funds would start coming in, is not known to me,” Sinha said.
“In 2010-11, the net inflow in equity schemes of the mutual fund sector was down by about Rs 13,000 crore, while in 2011-12, the net inflow was higher by Rs 600-700 crore. This is an encouraging development considering that the number of mutual fund folios were down in 2011-12,” the Sebi chairman, UK Sinha, said, at a press conference here on Monday.
In 2009, Sebi banned the practice of charging entry loads on mutual fund products making the product pricing more transparent. Mutual fund companies have been asking for the reintroduction of the entry load that would make the business more viable and profitable.
Evading a direct reply on the demands by Association of Mutual Funds in India (Amfi), Sinha said, “When there has been an increase in inflows even after the number of folios have gone down, it will not be fair for Sebi to jump to conclusions.” Sebi had not received any representation from Amfi on the same, he added.
The spread of the mutual fund business has not been up to the expectation of the potential of the market and Sebi has started the process of consulting agencies and shareholders to enhance the reach of mutual funds in India, he informed. Based on the responses of various stakeholders, the capital market regulator would consider setting up a committee to develop mutual funds business in India.
Sebi, which is in discussion with the insurance regulator Irda (Insurance Regulatory and Development Authority) to frame the listing norms for general insurance companies, hopes that the regulation would be out very soon.
The regulator has issued licenses to 13 qualified depository participants (QDP) to bring in qualified foreign investors (QFI) to invest directly in Indian equity markets.
“The entities need license to canvass for business outside India and minimum assets of Rs 500 crore. We have given licenses for 13 QDP. When the funds would start coming in, is not known to me,” Sinha said.
Source: http://www.mydigitalfc.com/mutual-funds/sebi-sees-no-reason-remove-entry-load-ban-mutual-funds-154
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