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Mutual funds not substitution for bank returns: Sebi chief

Press Trust of India  |  New Delhi 

today said mutual funds are not any substitution for as returns are not assured on such

However, he said mutual fund is the right route for to participate in the capital markets.

"Mutual funds investment is not any substitution for bank returns. If people are shifting from banks to mutual fund to that extent it is not an assured return but this is right way to come to if people want to come to capital markets," told reporters here.

"Right thing which is happening for the is that they are going through mutual fund route. Mutual fund route is where professional investment managers take the decision to invest your but there is no issue of panic. If they are investing in the capital markets the extant risk would be there," he added.

Currently, the country has 42 mutual fund players with assets under management of over Rs 22 lakh crore.

Asked about algo trades, said is keeping a watch on the issue and there is no reason for panic as risk management systems are quite robust.

In market parlance, algorithmic or 'algo' trading refers to orders generated at a super-fast speed by use of advanced mathematical models that involve automated execution of trade, and it is mostly used by large institutional investors.

"Our are robust and algo trade increases liquidity in trading. One of the advantages of algo trade is price discovery. We are totally watchful and there is no cause of any panic," said.

With respect to setting up of unified regulator for (IFSC), it said the issue has been going for a very long time.

There are models abroad where such types of have been regulated by independent regulators.

"I think government will come out with a for that and set up a separate regulator. I don't think will be regulator for this," he added.

Minister Arun Jaitley, in his budget speech for 2018-19, had proposed a unified regulator for the IFSC at GIFT City in Gujarat, a move that will contribute to better regulation and supervision of the financial entities.

has been set up by the as India's first IFSC that brings together world class infrastructure, connectivity, people and technology on a single platform for businesses across the world.

IFSC at is probably the first such centre to be launched after the 2008 global financial crisis.

When asked about the Budget's proposal for tightening of penalty on intermediaries and brokers to up to Rs 25 crore, Tyagi said that this was a well considered amendment and will only make enforcement efficient.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, February 10 2018. 17:55 IST