Sebi likely to make disclosure of AUM mandatory for MF

Market regulator Sebi is likely to make it mandatory for mutual fund (MF)players to declare their assets under management (AUM) and details of new schemes to ensure that retail investors take informed decision before investment.

"Sebi is working towards making MF industry disclose their AUM for a retail investor to understand. If you are making a particular scheme, it is important for a retail investor to know what has been the track record of the fund manager. We see no problem in disclosing that," Sebi chairman UK Sinha said at a CII meet.

The average assets managed by the MF industry, consisting of 40 players, stood at Rs 7,00,538 crore as of March 31, 2011.

Stating that penetration of industry is low in India, Sinha added, "We find that there are several irritants. So our attempt is to remove some irritants. This is to make easy for somebody to enter the market, at the same time we are seriously thinking about introducing more disclosures."

When asked if Sebi is contemplating to re-introduce entry load to incentivise distributors, Sinha said, "I don't think re-introduction of entry load as solution on table."

Sebi in 2009 had asked mutual fund companies not to deduct marketing and distribution charges from investment made by subscribers.

The upfront commission is now paid by the investor to the distributor directly.