To safeguard investors’ interest and help them maximise returns, markets regulator Sebi is set to tighten norms for mutual funds by asking them to lower the cost of investments and be more vigilant about risky assets.
The watchdog also wants fund houses to improve their disclosure regime and make it simpler for investors by doing away with the current practice of having too many schemes.
A slew of proposals is being discussed in this regard by Sebi’s Advisory Committee on Mutual Funds and a final decision would be taken soon by the regulator on the basis of recommendations of this panel, a top official said.
The proposed measures assume significance in the wake of a major crisis that erupted recently on account of significant exposure of a small mutual fund to distressed debt securities of a listed company, while concerns have been raised about similar exposures of quite a few other MFs.