Amfi open to turning into a self-regulatory body

Mutual funds industry body Amfi is open to become a self regulatory organisation in a gradual manner, a top official of the association said today.

The Association of Mutual Funds in India (Amfi) official told PTI that the body is ready to take up regulatory responsibilities. The statement came days after market regulator Sebi made a suggestion in this regard.

"We are open to taking up the responsibility and becoming a self regulatory organisation (SRO)... Sebi can assign us and empower us in certain areas, as at first we will take up the regulatory responsibility for certain defined spheres in the MF industry," Amfi chairman A P Kurian said.
    
"We will work with Sebi to evolve a working model," he added.
    
Sebi chairman C B Bhave had suggested at a CII event on mutual funds last week that Amfi should "seriously" examine donning the role of a self-regulatory organisation.
    
"A lot of debate is going around on self regulation and Amfi has been demanding the status of self-regulatory body... so, it can give a policy paper on the same to Sebi," Bhave had stated.
    
"If we have to grow as an industry, we should stress on self regulation," he added.
    
"We are working on a paper for the policy framework for the SRO to create a clear roadmap for the industry," Kurian said.
    
However, MF tracking firm Value Research CEO Dhirendra Kumar said that combining the roles of a trade body with that of a regulator is not such a good idea as it would lead to a conflict of interests.
    
"A self-regulatory role for Amfi will not be a great thing. MFs need a real regulator, which will be primarily focused on protecting investor interests," Kumar said.
    
Asked whether Amfi's SRO avatar will be in conflict with its role as a trade body, Kurian said, "We will definitely have to work towards striking a balance between both our roles."
    
The country's mutual fund industry has been growing strong over the past few years, and the average assets under management of the 37 fund houses was standing at over Rs 8.03 lakh crore at the end of May.
    
Bhave had also stated that the regulator as well as the industry should inform investors about the "real innovation" in mutual fund schemes and get the right incentive structure for financial products.
    
The stress should be on getting an entire range of simpler products, he added.