The Securities and Exchange Board of India has made it mandatory for mutual fund companies to disclose details of their investor awareness programmes. This comes after the market regulator found out that some fund houses were using funds earmarked for investor education for business-related activities.

In an exclusive interview to BusinessLine , SEBI Chairman UK Sinha said the capital market regulator is sending its employees undercover to investor education workshops to keep a tab on how fund houses organise them. Mutual fund companies were mandated to conduct workshops to improve awareness among investors by charging two basis points from the assets under management (AUM). For the entire industry, this works out to ₹ 263 crore on an AUM of over ₹13.17 lakh crore as on July 31.

“We have now got information on specific examples where we found that it was actually a distributors’ meet and they were calling it an investors’ meet. So, they are promoting their own business with these funds… we are taking action against them,” the SEBI chief said.

On the issue of recovering money from offenders against whom it had initiated proceedings, Sinha said SEBI has started training its officers to deal with such situations instead of recruiting people from other agencies.

SEBI is also dealing with the challenge of getting information about the assets of offenders. “Had it been a question of a demat account or a bank account, we can get hold of it. In matters like collective investment schemes, the main problem is that somebody has raised hundreds of crores but we don’t know where the offender has invested the money raised,” Sinha said.

Yet, SEBI has recovered ₹30 crore of the total default in payment penalty of about ₹175 crore. “I challenge you that you look at any other agency which has recovered ₹30 crore in less than a year of the powers being given to it,” Sinha said.

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