Exploring possibilities of easing norms for institutional placement

The Securities and Exchange Board of India is set to come out with a multi-pronged strategy to enhance the reach of the mutual fund industry. The board has set up a panel for the purpose. “The exercise has just begun,” said Mr U.K. Sinha, SEBI Chairman, on Monday.

He said that SEBI is concerned at the reach of mutual funds is not up to its (SEBI's) expectations or the potential of the market.

In 2010-11, the net inflow in to the equity schemes of mutual funds was down by about Rs 13,500 crore. But, in the following year, it turned positive with a net flow of around Rs 700 crore. “This is an encouraging development. But, the number of folios in the mutual fund industry has gone down in 2011-12,” he said.

Besides, it is also seriously exploring possibilities of easing procedural requirements for institutional placement of shares and offer for sale. Mr Sinha said, the idea is to encourage companies to comply with SEBI's recommendation on minimum public holding.

He pointed out that there are still 181 companies in the country which are not compliant of minimum public holding norm — 25 per cent in the case of private companies and 10 per cent in the case of PSUs. So far, only three issues have come out, of which two were institutional placements and the third, an offer for sale, he said.

On the investor complaints, Mr Sinha said, since June last year, when SEBI launched computerised complaints registering system, there were 35,000 complaints registered. More than two-third of this has been resolved within 30 days. The rest of them too will be sorted out very soon, he said.

According to him, more than 50 per cent of the complaints are against companies. Most of them are about not receiving dividends or annual reports.



(This article was published on May 7, 2012)
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