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SEBI urged mutual fund houses to consolidate similar schemes and reduce the clutter that a prospective investor would have to cut through before picking a scheme, the securities market regulator told heads of mutual funds at a meeting here on Wednesday.
The meeting was the first that UK Sinha held with the fund industry after receiving a one-year extension to his tenure as Chairman of SEBI. Today, an investor is faced with a choice of over 8,000 MF schemes when he chooses to start an investment, ER Ashok, CEO of MF robo advisory Scripbox, said.
DHFL-Deutsche Bank deal The regulator wants fund houses to make the universe of schemes smaller by merging plans of similar categories, such as creating a single large-cap equity fund.
Recently, when DHFL Pramerica Asset Managers acquired Deutsche Bank’s Indian mutual fund assets, SEBI insisted that similar schemes be merged before the acquisition went through.
The meeting with SEBI was attended by board members of industry body AMFI and select fund houses.
SEBI also asked fund houses to explore how the industry could leverage technology and the digital medium to increase the investor base and bring down the AMC’s cost of operations, a CEO of a leading fund house told BusinessLine .
SEBI also cautioned fund houses against making inter-group transactions, such as using assets under its management to buy or sell a group company’s assets to bail it out. It also intends to further simplify the KYC process for first-time investors, according to one CEO who attended the meeting, including using just an Aadhaar card or bank account details.
The fund industry also requested SEBI to look into allowing the industry to offer annuity products, currently the prerogative of the insurance industry, so that it can create retirement products.
Other requests from the industry included getting EPFO to invest in non-PSU fund houses (that is, outside of UTI, LIC or SBI) and creating a level-playing field for fund managers when it comes to approving new products, particularly a uniform maturity date for short-term bond funds or a single classification as to debt-to-equity ratios for balanced funds.
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