Need to incentivise MF distributors: SEBI

Sinha added that the SEBI mandate is framed in a way to protect investors and develop markets at the same time.

“Actually,I have already commented on this subject. We have seen that there is a need to incentivize distributors. Now,in what manner it will be done,we have not decided as yet. But I don’t think re-introduction of entry load is one of the solutions,” said Sinha.

It is about a year since the SEBI panel framed the takeover guidelines,a lot of which has received flak from various corporate bodies.

The norms in the draft proposal include a mandatory open offer for 100% stake and a suggestion to scrap non-compete fees.

A committee formed by SEBI had suggested that the open-offer trigger limit must be raised to 25 percent from 15 percent.

While the proposal to raise the open-offer trigger has been received well by industry bigwigs,some of them have still criticised it.

Sinha also added that there is a need for disclosures to be simple and beneficial to investors.

“SEBI will try to solve matters as soon as possible. We have already explained about how disclosures should be beneficial to people,so that people could understand and don’t find it complicated,” said Sinha.

Explaining the measure taken by SEBI and their motives,Sinha added that mutual funds must reach the remote parts of the country and in case there are any irritants,they would have to be removed immediately.

“I am not in a position to tell you what has been finally decided,since nothing has been finally decided. But the direction in which we are working is how to take the mutual funds to the remote corners of the country and if there are any irritants,those have to be removed. If there are any incentives that have to be there,good incentives have to be provided but obviously incentives have to be provided in a manner that they are not very costly and meet the required goal. The required goal is to reach out to people who are first-time investors,but they should also go to people in remote corners. So,if you look at the geographical distribution,it is a matter of worry for us,” said Sinha.

The Securities and Exchange Board of India is the regulator for the securities market in India.

Look to have presence in pension funds: SEBI to asset mgmt ind

Capital market regulator SEBI today asked the asset management industry to look at having presence in the pension funds,as retail investors would prefer the route.

“There is a good potential here (pension funds),which perhaps we are missing,” Securities and Exchange Board of India Chairman U K Sinha said at the CII summit on Mutual Funds.

“I would like to urge the industry to solicit pension funds and pension funds schemes,also for development of financial advisors in the country,” he added.

Sinha said in US 68 per cent of the households own mutual fund products through the pension route,perhaps through the pension reforms that took place in the US.

He said in India,the asset managers classified each investor alike,which according to him was a mistake.

“The pension products are required,as in US pension reforms helped the industry,” he said.

“I would ask the industry if we can work on that plan and then we can talk to other regulators. Important thing is to plan first,” he added.