SEBI's new rule will increase pressure on asset management companies

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Ahmedabad: The local mutual fund industry, which is worth about Rs 2 lakh crore, may have to invest thousands of crores of rupees in its own schemes under the new SEBI rules. The SEBI board approved the rules last month. At present, fund companies have to invest a maximum of Rs 50 lakh in all schemes. The SEBI board has approved the removal of the Rs 20 lakh limit to link the interests of asset management companies with thousands of unit holders. Mutual fund schemes have to be invested according to the risk involved. The risk condition will be according to the current draft of the risk-o-meter.

According to SEBI, AMC will have to invest 0.06 per cent in low-risk schemes and 0.15 per cent in high-risk schemes, which are usually equity schemes. 150 crore compared to Rs.

SEBI's Expert Group has proposed investments ranging from 0.07 per cent to 0.5 per cent. But the rule would require the funds to invest about Rs 4.5 crore, five times the current total investment. SEBI has initially decided to have a lower limit to make the new rules easier to implement.

SEBI said in the board meeting that the minimum contribution of AMC to mutual fund schemes should be reasonable and commensurate with the risks under the schemes. However, considering the financial impact on AMC, the amount of investment needs to be reconsidered five times.

Currently, AMC has raised Rs. It is necessary to maintain a net worth of Rs 50 crore. The SEBI committee has proposed that mutual funds be allowed to invest in their schemes out of their networth.

In this regard, the industry has said that the move would allow mutual funds to invest more in their own schemes and indirectly increase net worth. In addition, mutual funds will have to keep more money to meet the mark-to-market loss.

The SEBI Advisory Committee on MF has suggested that the AMC should ask the AMC to raise funds to offset the networth in the event of a long-term mark-to-market loss. The move will protect small AMCs that may soon face challenges in raising fresh equity.


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