The Advisory Committee on Mutual Funds appointed by the Securities and Exchange Board of India (Sebi), which is scheduled to meet on Friday, is planning to list a slew of recommendations before the regulator. Senior officials in the mutual fund industry say that the committee might recommend measures such as the merger of schemes, adoption of total return index (TRI) and an increasing amount of investor awareness campaign for Association of Mutual Funds in India (Amfi).
In the past also, the markets regulator had asked fund houses to merge similar schemes so that it was easy for investors to understand and invest in mutual funds. Currently, there are over 2,000 schemes in the domestic mutual fund industry. “We have to wait and see how Sebi brings in regulations regarding the merger of schemes, as this exercise will be challenging for big fund houses. For example, if one scheme having a corpus of `500 crore merges with another with the same amount of corpus, then a graded expense ratio calculation sets in, which will impact the income of such fund houses,” said a CEO of a leading fund house.
