Mumbai, June 23 (IANS) India’s markets watchdog Wednesday asked mutual funds to come out with simpler, investor-friendly products and said the industry can putforth proposals for a common policy for its governance.
‘AMFI must explore a self-regulatory role for the mutual fund industry. It can give a policy paper on mutual funds to Sebi, government,’ Securities and Exchange Board of India (SEBI) Chairman C.B. Bhave told the Mutual Fund Summit 2011 organised by the Confederation of Indian Industry (CII).
The Association of Mutual Funds in India (AMFI) is the association representing mutual funds in India, which has average assets under management of about Rs.8 trillion ($175 billion).
Bhave said the industry must streamline its offerings. He said there were now some 3,000-odd schemes available in the market. The large number of schemes confused investors and many schemes were meant for short-term benefits.
Bhave also said mutual funds should look at getting the distributors incentive scheme right so that the interests of individual investors are protected.
SEBI has abolished ‘entry loads’ on mutual fund schemes from August 2009, which were a charge levied on the customer by the fund at the start of the tenure of a particular scheme.
The proceeds from ‘entry loads’ were used to pay incentives to distributors to generate more sales.