Mumbai: Market regulator Sebi will soon come out with a long-term policy for mutual funds to help the industry create more understanding and better positioning of products amongst investors as fund houses have lost their focus, its Chairman U K Sinha said today. He said while there are other products like insurance which have a particular understanding and positioning in the minds of investors, MFs have lost their focus and there is a need to redraw attention on them.
“There is a need to refocus on the purpose and need to refocus on the goal (of mutual funds),” he said in his speech at a function here.
“The idea behind this long-term policy is to ensure that amongst the whole bouquet of financial products, the role and purpose of mutual funds should be established.” He, however, declined to elaborate on the proposed policy and said the issue has been taken up by the Sebi board and there has been extensive consultation going on it. “I do hope that in the next board meeting we will have clearance of this long-term policy.”
Talking about the Rajiv Gandhi Equity Savings Scheme, Sinha said the plan has not picked up well and the regulator will try to find out the reasons for the same. “We are going to engage with the industry to understand what are the problems and challenges. And, if there is anything required which involves the Government, we propose to take up the matter with them to make it more popular.” He said the market regulator is looking at ways to encourage industry to come out with real estate funds which came into its regulations five years back but none of the player has launched any scheme.
“We have received some representations and we are trying to find out what change or encouragement is required so that this particular product is launched.” Speaking about retail participation in the equity market, the Sebi chief said it has dropped by 5 per cent to 61 per cent as on March 31, 2013 as against 66 per cent a year ago.
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