SEBI has shared its new plans for the Rs.24 lakh crore mutual fund industry. SV Muralidhar Rao, Executive Director, SEBI said that the market regulator has certain tasks in hand, which they plan to implement in the immediate future. He was speaking at the 13th CII Mutual Fund Summit held today in Mumbai.
Here are the four regulations that you could expect in the near future
Valuation of debt securities: Rao said that the market regulator would review the existing norms followed by fund houses to value debt securities.
He said that the market regulator is considering introducing mark-to-market valuation for all debt securities. With this, fund houses may have to do mark-to-market valuation of debt securities having maturity of less than 60 days.
Currently, SEBI rules says that fund houses have to do mark-to-market valuations of securities having maturity of up to 60 days and more. Liquid funds hold securities having maturity of up to 91 days. However, most liquid funds hold securities having maturity of less than 60 days.
Most fund houses rely on rating agencies to derive NAV. These rating agencies often look at accrual to value debt securities.
SEBI to open gates for commodity mutual funds in India: SEBI will soon enable fund houses to come up with commodity mutual funds and PMS. In India, mutual fund houses are not permitted to invest in commodities other than gold. However, a few fund houses have thematic funds, which invest in companies engaged in commodities business.
Commodity funds would be able to invest in a broader spectrum of agricultural, metal and mining commodities such as food crops, spices, fibres, copper, aluminium, oil, gold, silver and platinum.
Offsite supervision of mutual funds: SEBI will soon launch a platform to track operational practices prevailing in fund houses. This platform would be similar to SEBI Surveillance platform for stock exchanges. In this platform, SEBI will take data feed from R&T agents, fund houses and AMFI. SEBI would generate reports on various operational aspects and ask questions if the market regulator finds any aberration.
Defining retail investors: Rao said that SEBI would soon define retail investors for B30 incentives. SEBI has directed fund houses to charge the additional 30 bps applicable on B30 cities only on retail AUM. However, till the time SEBI comes out with a definition on retail investors, industry can continue to charge additional TER on individual assets i.e. retail and HNI assets.
