Restrictions on MFs' other biz activities under review

Mumbai: Sebi is reviewing rules that impose restrictions on business activities of asset management companies, a senior Sebi official said on Tuesday.

"Regulation 24(b) is a restrictive clause. It is not allowing mutual fund players to use their expertise and expand. We have identified certain areas, we are in constant dialogue with the industry and trying to remove all the obstacles," Sebi executive director Manoj Kumar said at the CII Mutual Fund Summit here.

He added that this is the only restrictive clause under the entire mutual fund regulation.


"We are trying to review the entire regulation because we have come to the conclusion that mutual fund regulation is the lengthiest of all the Sebi regulations," Kumar said.

Sebi is also re-examining the institutional mechanism for MFs that was put in place to prevent market abuse and to ensure internal controls. "Some re-examination has already started for institutional mechanism framework, which we have articulated that has a very robust back testing done before we launched it but still there are some issues so we are taking up with the industry and we are going to resolve whatever challenges are there in the institutional mechanism," Kumar said.