Sebi keen to implement self-regulation for the Rs 10 trillion industry
Market regulator Sebi yesterday said it was keen to implement self-regulation in the Rs 10 trillion mutual fund industry at the earliest and said it will soon come out with new rules for distributors and advisors. "There is a demand for self-regulatory organisations (SROs) in the MF sector and we are very keen on that and are also hopeful of implementing the same soon," Securities & Exchange Board of India (Sebi) Chairman UK Sinha told reporters on the sidelines of a mutual fund summit.
Sinha also said the regulator is finalising norms for distributors and investor advisors and they will be issued shortly. The Sebi chief said that although the idea of an SRO has been challenged in court, he is hopeful of its implementation. The Financial Planning Supervisory Foundation (FPSF), where retired Supreme Court Justice BN Srikrishna is a director, has taken Sebi to court over the SRO matter.
It contends a possible conflict of interest if an industry group that has been protecting the interests of MFs appoints a company as an SRO to regulate its distributors and agents. Srikrishna chaired the Financial Sector Legislative Reforms Commission, which recommended sweeping changes in financial sector regulations. Sinha also said pension funds should come into the mutual funds sector and tax benefits should be offered for investors in real estate investment trusts and infrastructure. The size of the pension market, estimated at over Rs 1.5 trillion in 2010, is expected to rise to over Rs 2 trillion in 2015 and over Rs 4 trillion by 2025.
Sinha said that Sebi had asked the government to provide clarity on tax benefits for new products like REITs (real estate investment trusts) as also for infrastructure investment trusts and debt securities. "Sebi will soon finalise norms for REITs, but is awaiting clarity on taxation issues," he said, adding that the regulator wants such trusts to get tax pass-through status.
Addressing the MF summit organised by the Confederation of Indian Industry, Sinha said there are "certain anomalies in withholding tax on debt securities" and he expressed hope that the government will soon provide clarity and tax pass-through status to REITs. "We have recommended to the government for tax breaks for REITs investors and hope the government will consider the same," he said. Sinha also said that Sebi approved a long-term policy for mutual funds, which includes enhancing the reach and promoting financial inclusion, tax treatment and obligations of various stakeholders, among other things, to achieve sustainable growth of the industry and mobilisation of household savings.
Mutual Fund Update
Kotak MF announces change in exit load under two schemes
Kotak MF has announced change in exit load structure under Kotak Flexi Debt Scheme and Kotak Bond Short-Term Scheme with effect from July 1. Accordingly, under Kotak Flexi Debt Scheme, the exit load will be 1% if the units are redeemed/switched-out within 180 days from the date of allotment and nil thereafter. Under Kotak Bond Short-Term Scheme, the exit load will be 0.50% if the units are redeemed/switched-out within 30 days from the date of allotment and nil thereafter.
Axis MF launches Axis Fixed Income Opportunities Fund
Axis MF has launched Axis Fixed Income Opportunities Fund, an open-ended debt scheme. The issue will remain open for subscription till July 9. It will be benchmarked against CRISIL Short-Term Bond Fund Index and will be managed by Devang Shah and Kedar Karnik.
Canara Robeco MF announces change in fund management responsibilities
Canara Robeco MF has announced change in the fund management responsibilities with effect from June 25. Accordingly, Canara Robeco Gilt PGS, Canara Robeco Income Fund and Canara Robeco Dynamic Bond Fund will be managed by Avnish Jain, Canara Robeco Short-Term Fund will be managed by Suman Prasad, Canara Robeco Liquid Fund, Canara Robeco Treasury Advantage Fund, Canara Robeco Floating Rate Fund and Canara Robeco Gilt Fund will be jointly managed by Avnish Jain and Suman Prasad and Canara Robeco Gold Exchange Traded Fund will be jointly managed by Avnish Jain and Kiran Shetty.
HDFC MF announces change in exit load under three schemes
HDFC MF has announced change in exit load structure under HDFC Balanced Fund, HDFC Capital Builder Fund and HDFC MF Monthly Income Plan – Long-Term Plan, with effect from July 1. Accordingly, if the units are redeemed/switched out on or before 18 months from the date of allotment, the exit load will be 1.00% and nil thereafter.
Change in exit load structure announced under Reliance Index Fund – Sensex Plan
Reliance MF has announced change in exit load structure under Reliance Index Fund – Sensex Plan with effect from July 1. Accordingly, if the units are redeemed/switched-out on or before completion of seven days from the date of allotment, the exit load will be 0.25% and nil thereafter.
NFO Period of HDFC CPO-II-36M June 2014 extended
HDFC MF has extended the closing date of the NFO period of HDFC CPO-II-36M June 2014, a plan under HDFC Capital Protection Oriented Fund - Series II (a close-ended scheme) to June 25.
Change in exit load structure under HDFC Corporate Debt Opportunities Fund
HDFC MF has changed the exit load structure under HDFC Corporate Debt Opportunities Fund, an open-ended income scheme with effect from July 1. Accordingly, if redeemed/switched out on or before 12 months from the date of allotment, the exit load will be 2%, the exit load will be 1% if redeemed/switched out after 12 months but within 24 months from the date of allotment and nil thereafter.
Franklin Templeton MF announces merger of two schemes
Franklin Templeton MF has announced that with effect from August 1, Templeton India Children's Asset Plan – Gift Plan would be merged into FT India Balanced Fund and Templeton India Children's Asset Plan – Education Plan would be merged into FT India Monthly Income Plan.
Franklin Templeton MF extends merger date
Franklin Templeton MF has extended the date of merger of Templeton India Government Securities Fund-Treasury Plan (TGSF-TP) into Templeton India Government Securities Fund-Composite Plan (TGSF-CP) from July 18 to July 25.
