MFs to use assets to fund regulator

Mutual funds will use part of their assets under management (AUMs) to finance the operating costs of a Self Regulatory Organisation (SRO) to regulate their agents and distributors.

Mutual funds will use part of their assets under management (AUMs) to finance the operating costs of a Self Regulatory Organisation (SRO) to regulate their agents and distributors.

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The Securities and Exchange Board of India (SEBI) has agreed to set up an SRO to regulate the MF distribution business.

While the seed capital for setting up of the proposed SRO would be provided by SEBI and the mutual fund industry body AMFI (Association of Mutual Funds in India), some entities have also shown interest in sponsoring such an SRO, a senior regulatory official said.

The market regulator would follow a transparent process for selection of the sponsor for the SRO, he added.