SEBI boost to MF sector; grants IPO clearance power to regions

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Market regulator SEBI is planning a multi-pronged strategy to revive the sagging mutual fund industry in the country. It also delegated power to clear IPOs up to Rs 500 crore with its regional offices.

“SEBI is concerned that MF spread has not been up to the expectations. So, our officials are in talks with various stakeholders including investment advisors, investors, asset management analysts etc to get some suggestions to improve the climate,” board chairman Mr U.K. Sinha, who was in Chennai to attend a investors’ meet told reporters on Monday. “A multi-pronged strategy will be evolved in consultation with all and a separate panel to formulate some guidelines may be set up later if needed,” he added.

MF net inflows have reduced since 2010-11 which saw it dip by Rs 13,500 crore. But, 2011-12 saw this inflow turn positive by Rs 600-700 crore.

“There has been a drastic drop in the number of portfolios too,” Mr Sinha pointed out.

On the issue of IPO clearance by regional offices, the SEBI chairman said “Regional offices can clear proposals of IPO up to Rs 500 crore.

SEBI has planned to open 10 new regional offices, he added after inaugurating the he said.
On the issue of listing norms for non-life insurance companies, Mr Sinha said “We are in advanced stage of discussions with insurance regulator IRDA for norms for general insurance companies.”

He also said SEBI had issued licenses to 13 qualified depository participants (QDP) to bring in qualified foreign investors (QFI) to invest directly in Indian equity markets.

“The entities need license to canvass for business outside India and minimum assets of Rs 500 crore. We have given licenses for 13 QDP. When the funds would start coming in is not known to me,” Sinha said.

About SEBI’s order on public shareholding norms in companies, Mr Sinha said 181 companies have been identified as non-compliant with the norms.

With few takers for its recent IPP and OFS route to increase public holding, SEBI is “looking into other proposals and suggestions to strengthen these procedures,” the chairman said.