MF industry mulls stir over SEBI move

Ten days after the Securities and Exchange Board of India (SEBI) decided to do away with entry load on mutual fund (MF) schemes, fund houses are mulling a stir opposing the directive.

Ten days after the Securities and Exchange Board of India (SEBI) decided to do away with entry load on mutual fund (MF) schemes, fund houses are mulling a stir opposing the directive.

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“Lack of clarity from SEBI has put fund houses in a bind. The issue has lot of uncertainty,” said a senior official from a fund house, requesting anonymity. He said the industry is mulling a protest in July.

“Even within the industry there would be no level playing field. The decision is tilted in favour of larger asset management companies (AMCs). Those who are already sitting on a load would use the amount to pay existing customers while new or small AMCs would suffer,” said another senior executive of an AMC, on condition of anonymity. We seek rationalisation, he added.

“AMFI has approached the SEBI with a request to reconsider the decision. However, there does not seem to be much traction from the SEBI,” said Piyush Surana, Chief Executive Officer of Shinsei Investments.