SEBI May Take Action Against Fund Houses for 18 Non-Performing MF Schemes

The Securities and Exchange Board of India (SEBI) has observed 18 consistently non-performing mutual fund schemes and decided to take action against those mutual fund houses. Some fund houses are also under probe for non-compliance and non-performing with stated investment objectives.

SEBI may also inspect Asset Management Companies (AMCs) to check any violation in rules with regard to mutual fund objectives. The chairman of SEBI, expressed concerns about the mutual fund schemes of nine fund houses which have been under-performing the benchmarks. Also, there are nine other AMCs where 50% of the schemes have been under-performing since 3 years.

The chairman of SEBI said that, he will engage with CEOs, fund managers and even trustees of these companies to find out the reason for the poor performance of the schemes. He said that, the slowdown and bearish market condition have depressed investors.

To ensure safety of the investors, the regulator would soon come out with fresh guidelines for the Initial Public Offering (IPO) in 3 months and merchant bankers will be accountable for IPOs.

The chairman of SEBI said that, the main objective is how to reach out to more people and how to protect investor by way of safety margins. One of the officials of Aditya Birla Group said that, for the last couple of years, all the regulations have been directed towards AMCs. Now, the regulator should consider some regulations in view of investor protection.

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