Karvy fallout: Sebi plans tighter norms to protect mutual fund investors

Regulator proposes discontinuing of pooled accounts, to protect investors

The case of wrongful share pledging by Karvy Stock Broking has led the Securities and Exchange Board of India (Sebi) to consider bringing in tighter norms. This is to protect mutual fund (MF) investors from falling prey to any such misuse of their investments.
 
In a consultation paper issued on Monday, the regulator pointed out the scope for misuse of investments when MF transactions were executed by intermediaries such as brokers and digital platforms provided by MF distributors and investment advisors.
 
In the case of brokers, Sebi observed: “Units and funds move in an aggregate manner from the