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At a panel discussion held at the CII Annual Mutual Fund summit 2025, Manoj Kumar, Executive Director, SEBI said that SEBI is working on scheme categorization as the current labels are not easy to understand, especially for first-time investors.
Kumar said they are working on simplifying these names and categories. The goal is to make mutual fund investments more understandable for common people, he added.
Latha Ventakesh, Consulting Editor, CNBC TV18 moderated this panel in which other speakers were A Balasubramanian, MD and CEO, Aditya Birla Sun Life AMC, DP Singh, Deputy Managing Director, SBI Mutual Fund, Imtaiyazur Rahman, CEO and MD, UTI AMC and Sandeep Sikka, MD and CEO, Nippon India Mutual Fund.
During the discussion, the SEBI ED said that SEBI is looking to ease business restrictions for AMCs by reviewing Clause 24B of the mutual fund regulations.
The clause says “Restrictions on business activities of the asset management company
24. The asset management company shall, -
(a) not act as a trustee of any mutual fund;
(b) not undertake any business activities other than in the nature of management and advisory services provided to pooled assets including offshore funds, insurance funds, pension funds, provident funds, or [such categories of foreign portfolio investor subject to such conditions, as maybe specified by the Board from time to time], if any of such activities are not in conflict with the activities of the mutual fund”
Manoj Kumar acknowledged that this clause has been seen as a restriction on how AMCs can operate, explaining it is the only clause in the regulations that starts with the word “Restrictions”. He said that SEBI is actively working on removing the obstacles around this regulation.
He said that SEBI and AMCs are also working on special products like Tarun Yojana to attract new investors and those with limited income in smaller towns.
The panel emphasized that the mutual fund industry is now highly cooperative and encourages open dialogue with regulators. Sundeep Sikka cited an example where SEBI responded positively when approached regarding foreign capital restrictions that were affecting Japanese institutional investors.
Imtaiyazur Rahman described the mutual fund space not merely as an industry, but as a “movement” founded on trust. He illustrated the evolving mindset of young investors with a personal example: his sons now invest their Eid gifts immediately, reflecting a positive shift in financial behavior.
A. Balasubramanian highlighted the importance of the debt capital market alongside the equity market, suggesting it deserves greater attention. He also spoke about the increasing number of investors in the mutual fund industry and projected that this growth could bring the industry to the Rs.100 trillion mark.
The panel also addressed the idea of introducing performance-linked fees in mutual funds. In response, D.P. Singh argued that returns should not be the sole measure of performance. A fund manager may sometimes hold back investments and maintain cash positions if the market appears too risky. While this may lead to lower short-term returns, it plays a crucial role in protecting investors’ money and maintaining long-term trust
