The fund houses feel that fund consolidation is an investor-friendly move.
AMCs feel that SEBI has taken a right move by not allowing AMCs to float NFOs with same or similar theme as an existing fund. The fund houses feel that this will avoid confusion in investor’s mind.
“The regulator has been talking about it from a long time and I feel it is fair as only those NFOs that have a different theme and approach is allowed. It also does not make sense to launch schemes of same themes,” says Himanshu Vyapak, Executive Vice President, Reliance Mutual Fund.
Aashish Somaiyaa, Head–Retail Business, ICICI Prudential Mutual Fund agrees, “This will avoid confusion in the minds of people. We appreciate this move of SEBI and we also encourage it. We ourselves merged two fusion funds into one, early this year.”
Vijai Mantri, MD & CEO of Pramerica Mutual Fund endorses the move.
Reportedly, the regulator has informally told the AMCs to collect minimum Rs. 10 crore in equity NFOs and Rs 20 crore in non-equity.
SEBI has asked companies to merge the existing schemes if the themes are same, but it is not easy for AMCs to do so. “SEBI’s move is in the right direction but STP is an obstacle in fund mergers. There is a tax liability there on the investors on the closure, which creates a problem,” said Value Research CEO Dhirendra Kumar.
