Securities and Exchange Board of India’s (Sebi) circular on scheme and category consolidation aims to standardise how similar-characteristics schemes are defined, and bring down the total number of schemes. Will this end be achieved, we ask the experts.
Kunal Bajaj, Founder and CEO, Clearfunds
What’s in a name? A lot, if Sebi’s new move is anything to go by. At present, customers are besieged by a bewildering array of colourfully named funds from the same asset management company (AMC). If you look past the fancy branding, these schemes often offer the same features. Sebi’s move to tightly define how funds are categorized (and therefore, named) will help investors clearly understand what each fund is all about before choosing one. Sebi should put index funds and exchange-traded funds (ETFs) the same category as the index they track—this will allow apples-to-apples comparison for the customers.