Aligning profit and protection

SEBI TIGHTROPE ON RATIONALISING COSTS & INVESTOR-FRIENDLY STEPS; PROPOSALS WARRANT DEEPER PROBE

- SANDEEP PAREKH

IN 1774, A Dutch merchant and broker established what is widely regarded as the first mutual fund (MF) by inviting investors to form a trust named Eendragt Maakt Magt (Unity creates strength).

Over time, the MF structure has evolved across jurisdictions. Continuing this process, on October 28, the Securities and Exchange Board of India (Sebi) released a Consultation Paper on Comprehensive Review of Sebi (Mutual Funds) Regulations, 1996, proposing amendments to align the distribution of returns between asset management companies (AMCs) and investors. A few of the major changes, which are the source of heated discussions in the industry, are discussed below.