SEBI wants MFs to spend money on investors

Concerned over large-scale outflow from mutual fund schemes,market regulator SEBI wants fund houses to invest part of their profit on cementing ties with investors and curtail commissions and freebies to agents.

Market watchdog SEBI,which also oversees mutual funds,is of the view that fund houses can improve their commission bargaining power by working on consolidation in the distribution network and bringing down the number of agents and distributors.

In its last meeting,the SEBI board discussed the impact on mutual fund industry from regulatory steps such as abolition of entry load taken in the past one year and was of the view that there has been a positive impact on the profits from the actions taken by the regulator,an official said.