Referring to the ban on upfront commission and rationalization of TER, SV Muralidhar Rao, Executive Director, SEBI said that these regulatory reforms may be painful in short term but will have positive impact on the long term growth of the mutual fund industry. He was speaking at the recently held CII Mutual Fund Summit 2018.
Rao said, “I would like to emphasize that along with valuable gains, which would result from the regulatory changes introduced, there could be some pain in short term as the industry needs time to readjust to the new business practices. However, I am sure that potential benefits for all stakeholders in the long run would compensate the short term discomfort.”
Emphasizing that the growth is impossible without change, Rao further said that there is a need to accept changes in the right spirit. The regulatory changes that are being made for the growth of the industry needs to be understood and appreciated, he added.
Rao said, “More than anything else, maintaining public confidence in the integrity of mutual funds is very important. At the end of the day, good governance, discipline and right conduct are conducive to healthy development and long term sustainability of the mutual fund industry.”
