SEBI looking to regulate MF Distributors

Market regulator Securities and Exchange Board of India (SEBI) is working on a plan to bring mutual fund distributors within its purview. The distributor industry is today plagued by acute mis-selling and Sebi's entry could change the way you buy and sell mutual funds. CNBC-TV18’s Mrinalini Krishna reports.

So far, mutual fund distributors have been an unregulated community — but not for long. Market regulator SEBI is trying to set in place regulations to govern these distributors and adviser's.

The longer-term game plan has to be that this community — call them advisers, distributors — have to come under a regulatory framework,” SEBI Executive Director KN Vaidyanathan said.

The mutual fund industry welcomes this move since it has often complained of being held to ransom for higher distribution commissions.

“Some sort of regulation for distributors, in some way [is needed]. [Though] I don't know how to do it, I don't have any views on it in detail,” said UK Sinha, CMD of UTI Mutual Fund. “There has been a high degree of mis-selling, somebody has to police it.”

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