Translate

Tuesday, November 18, 2008

SEBI saves the day for retail MF investors

The Securities & Exchange Board of India (SEBI) is in the process of firming up a policy to increase retail participation in mutual funds (MFs) to neutralise or lower the impact of large outflows by corporate or institutional investors.

The regulator is now weighing the option of segregating corporate and retail investments so that retail investors are not impacted even if corporate investors exit schemes early, a person familiar with the matter said. What this could mean is that fund houses would be told to float separate schemes targeting institutional and retail investors, a practice which is prevalent overseas.

“In such a scenario, even if a large corporate investor pulls out
money from a scheme, only the other corporate investors need to worry — not the retail investors as is the case now,” said a person associated with the proposed changes that are underway. SEBI is already in talks with the industry. The regulator and the government are looking at addressing the issue, which has exposed the weak links in the financial sector.

The trigger for the proposed changes are last month’s developments. The mutual fund industry was rocked last month after large corporate investors pulled out some of their investments in
debt schemes due to the liquidity crunch, which gripped the financial markets, and also on concerns related to the credit quality of the debt paper in some of the fixed maturity plans (FMPs) floated by some fund houses.

No comments:

Economic Event Calendar

GMT+5:30 Event Vol. Actual Consensus Previous
Saturday, Jun 14
01:00 CFTC S&P 500 NC Net Positions 1 $-69.4K
01:00 CFTC Oil NC Net Positions 1 168K
01:00 CFTC Gold NC Net Positions 1 $187.9K
01:00 CFTC GBP NC Net Positions 1 £35.2K
01:00 CFTC AUD NC Net Positions 1 $-63.2K
Monday, Jun 16
04:00 Business NZ PSI 2 48.5
04:31 Rightmove House Price Index (MoM) 1 0.6%
04:31 Rightmove House Price Index (YoY) 1 1.2%
12:00 Producer and Import Prices (YoY) 1 -0.5%
12:00 Producer and Import Prices (MoM) 1 0.1%
Economic Calendar >> Add to your site

Best Mutual Funds

Recent Posts

Search This Blog

IPO's Calendar

Market Screener

NSE BSE Tiker

Custom Pivot Calculator

Popular Posts

Market & MF Screener