SEBI says MF sector need to look at other growth options

Mumbai: Indian mutual fund industry requires to look at other options to grow rather than rely on fund inflows from corporates, said Mr M. Damodaran, SEBI Chairman. SEBI said large funds from corporate houses invested in mutual funds could generate a possible conflict of interest. Mutual funds need to look at new products to attract smaller investors and ensure that the industry does not become stagnant. Liquid funds by themselves cannot sustain the mutual fund industry in the long-term. If large liquid funds come from corporate houses, it is not a healthy indication.

The Association of Mutual Funds (AMFI) could count on SEBI to work with them to put new products in place. On the issue of governance, Mr Damodaran suggested mutual fund could assume a slightly more pro-active role in the companies invested in. SEBI was in the process of writing out revised regulations that will entrust trustees with a higher level of responsibility in the mutual fund industry. Responding to the AMFI's proposal to introduce PAN as a sole identification for investors in a phased manner, SEBI said the regulator might look into the suggestion. SEBI has mandated that by July 2, PAN will be the sole identification number.