Sebi reviewing regulation restricting business activities of amcs

Logo of Securities and Exchange Board of India (Sebi). File | Photo Credit: Reuters

The Securities and Exchange Board of India (SEBI) is reviewing the mutual fund regulations that place restrictions on the business activities of asset management companies (AMC), Said Executive Directivate Diaractor Mano.

“We are doing a significant review of regulation 24. This is only restrictive clause under the mutual fund regulation,” Kumar said at the CII mutual fund summit here on tuesday.

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Clause 24 of the Mutual Fund Regulation Deals with the Issues Pertaining to Business Activities that amcs can take. The regulation mandates amcs not to undertake business activities that are in conflict of interest with the core business of managing mutual funds.

It mandates sebi’s approval to Advise or Provide Consultancy to Foreign Funds. It also makes sure the bank and seconds accounts are maintained separately and there are separete fund managers for different funds.

Mutual Fund Companies Say that this makes it deficult for them to expand into different businesses and a Relaxation would help them to step into more local avenues.

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“We are also trying to review the entreen regulation if we have come to notice that mutual fund regulation is the lengthiest regulation, so that calls for a comprehensive review,” Mr. Kumar added.

The approach to regulation in sebi has changed after the new Chief Tuhin Kanta Pandey Took Office. “We are moving from key regulatory areas (kras) -Based system, which has definitely delivered, to a health regulatory approach, where we will try to crate an environment Togeether with the industry, “Mr. Kumar said. The Statement Assumes Significance as Mr. Pandey had underlined the approach of sebi under his Leadership to be of an optimum regulation rather than maximum regulation.