Industry body, Assocham on Friday welcomed the measures announced by market regulator Sebi to boost capital market and the mutual fund (MF) industry.
Sebi’s measures are well-intentioned and aimed at reaching out to more domestic pool of capital. The steps taken up by the watchdog with regard to MFs will help increase the reach of the industry, it said.
“SEBI decision to encourage mutual funds to penetrate into smaller cities is certainly a welcome move, even though it would not fully alleviate the problems of the ailing mutual fund industry,” Assocham said.
The industry body, however, noted that it would take a lot of time, effort and expenses for the mutual fund houses to go deep into the hinterland and raise resources.
Sebi yesterday announced a slew of measures to increase the reach of MFs. These included provision of incentives to asset management companies in proportion to the sales in the rural areas.
The industry body said the SEBI decisions, including those relating to IPOs through electronics means and giving assured allocation of shares to retail investors, would boost the capital market.