Market regulator SEBI (Securities and Exchange Board of India) has introduced many reforms for retail investors.
On Thursday, SEBI at its board meeting has decided that entire exit loads (usually 1%) charged to investors who exit within 12 months would now be credited to the scheme. The regulator has also asked asset management companies (AMCs) to maintain a certain portion of their asset management fees annually for the investor education campaign.
To curb mis-selling, SEBI has suggested measures to create a system of identification of actual sales personnel of distributors, and inclusion of mis-selling as a ‘fraudulent and unfair trade practice’ under SEBI Regulations.
To increase the base of mutual funds distributors, SEBI has suggested to include postal agents, retired officials from government, banks, retired teachers, etc for distribution of simple products.
Though the above measures are short-term in nature, its 14-member Mutual Fund Advisory Committee would also work towards developing a long-term policy which will address aspects related to tax treatment, obligation of various stakeholders, promoting financial inclusion, etc.
The Committee may take six months to come up with policy after consulting the industry participants and general public.