The Security and Exchange Board of India, SEBI on Wednesday has announced to constitute an advisory committee for mutual fund to prevent the future of investors and to raise the service of Mutual Fund industry. SEBI is also considering to establish a mandatory board of trustees for the MF industry.
Speaking at the fourth Mutual Fund Summit 2008 organised by the Confederation of Indian Industry, SEBI Chairman C B Bhave said, “An advisory committee for the mutual fund industry will be set up soon on the lines of the Primary Market Advisory Committee and the Secondary Market Advisory Committee. It will discuss and debate issues and policies for the sustainable growth of mutual funds.”
“We have received complaints from investors in areas where redemptions are handled improperly. No attention is paid to the investor when he is going out since the focus is more on investors coming in,” said Bhave.
To look out all these matters, SEBI is considering to set up an advisory committee to raise the performance of the MF industry and to sort out the problems of the customers, as informed Bhave.
“The committee will be set up within a month and will understand the needs and problems of the industry and to see if any regulatory changes are required,” said Bhave.
Bhave has also announced to set up a board of trustees that would help the MF houses in operating it properly. “Trustees play an important role in the proper functioning of the fund houses. A workshop on trustees will be conducted in two months to discuss how to make this office more effective.
Intermediaries and investors can also be invited to share their views on how to further strengthen the trustee office,” said SEBI Chairman.
Addressing to Mutual fund houses officials, Bhave suggested to MF houses to pay attention more towards the needs of the investors instead of attracting more customers.
“All the players in the industry are competing for savings of investors. Thus, in order to attract more investors and grow, it is pertinent to overcome challenges,” added Bhave.
‘The advisory committee will look all the short and long terms problems and help the MF houses to sort out the problem soon. SEBI is also looking to set a framework in this regard’, as per regulatory Chairman said.
Speaking over the problem of raising funds, SEBI suggested, “The industry should conduct a survey among investors to understand their grievances and concerns and to know which schemes they invest in to get better returns.”
“A fund house should treat an exiting investor in the same way it treats a new investor, so that he is encouraged to invest in future schemes of the fund house.” he added.
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