Strategies to make mutual fund rules more investor and market friendly: SEBI authorities
Existing regulations governing the sector are among the lengthiest and need simplification to equal progressing investor needs and industry innovations, stakeholders stated.
The Securities and Exchange Board of India (SEBI) is carrying out a thorough evaluation of shared fund regulations to make them more investor-centric and industry-friendly, a senior official stated on Saturday (June 21, 2025). “We are reviewing the whole shared fund regulative framework to enhance ease of doing organization for all stakeholders, including the regulator,” SEBI executive director Manoj Kumar stated at the 17th Mutual Fund Top organised by the Indian Chamber of Commerce (ICC) here. Existing policies governing the sector are amongst the lengthiest and need simplification to equal progressing financier needs and market innovations, stakeholders said. “The process has begun and quickly we will come out with draft guidelines for feedback and consultation process before it is settled,” Kumar stated without offering any timeline for the rollout of the brand-new rules. Kumar outlined the regulator’s strategic roadmap to reinforce India’s securities market, with mutual funds placed as a crucial pillar in promoting inclusive monetary growth and financier security. A consultation paper on guidelines which governs advisory functions in mutual funds is likewise in the pipeline. Dealing with the event, Kumar said India has actually undergone major market changes under SEBI’s stewardship. These include the shift to an electronic trading community in 1998, followed by achieving 100 percent dematerialisation of shares, making India the only jurisdiction worldwide to do so. “The third improvement is unfolding now through the shared fund revolution,” he stated, calling it a foundation of SEBI’s “optimal policy” method, one that looks for balance among the interests of the regulator, the market, and financiers. While India’s mutual fund industry has actually crossed Rs 72 lakh-crore in AUM and monthly SIP contributions have touched Rs 28,000 crore, the investor base stays minimal to just 5 crore in a population of 140 crore, Kumar mentioned. SEBI is likewise actively evaluating scheme categorisation norms to make them more intuitive for financiers, while making sure all offerings stay “real to label” to avoid mis-selling. To offer broader choice to investors, SEBI has actually authorized a brand-new product classification, referred to as SIF, aimed at investors with ticket sizes between Rs 10 lakh and Rs 50 lakh. Shared funds were chosen to handle these items given their recognized governance and handling of retail circulations. Parallelly, SEBI has actually opened faster registration windows for Portfolio Management Services (PMS) and Alternative Financial Investment Funds (AIF) with comparable offerings. Dealing with industry issues over stress test disclosures for mid- and small-cap funds, Kumar reaffirmed SEBI’s disclosure-based regulative model, stressing that informed financiers are central to market resilience. While he acknowledged that some disclosure requirements might seem challenging, he assured stakeholders that SEBI remains open up to feedback and improving procedures. He advised the industry to prevent circumstances that require regulatory intervention, stating, “Our goal is not to disrupt however to allow service to flourish.” Highlighting the untapped capacity in eastern India, Kumar said SEBI views West Bengal and the Northeast as tactical areas for shared fund expansion, highlighting the requirement for targeted penetration efforts. Echoing this vision, AMFI chief executive V N Chalasani said India is transitioning from financial inclusion to monetary well-being, where saving smartly and investing carefully will enable sustainable wealth production. He cited the exponential development of shared funds post-2017, following SEBI’s financier education required, which assisted expand the financier base and enhance financial awareness. However, Chalasani pointed out that India’s shared fund AUM still forms only about 20 per cent of GDP, compared to an international average of 65 percent. He stressed the requirement for much deeper monetary literacy, particularly in Tier 3 and 4 cities, where AMFI is focusing through school and university programmes, distributor growth by means of India Post, and brand-new item innovations focused on mid-income investors. “Every Indian can develop from a saver to an investor and ultimately a wealth creator,” he said, calling for sustained collaboration in between regulators, market, financiers and teachers to develop an empowered, economically resistant India.
“The third improvement is unfolding now through the mutual fund transformation,” he said, calling it a foundation of SEBI’s “optimal policy” approach, one that seeks balance among the interests of the regulator, the market, and investors. To offer broader option to investors, SEBI has authorized a new item classification, referred to as SIF, aimed at financiers with ticket sizes between Rs 10 lakh and Rs 50 lakh. He cited the rapid development of shared funds post-2017, following SEBI’s investor education mandate, which assisted expand the financier base and enhance financial awareness. “Every Indian can progress from a saver to an investor and eventually a wealth developer,” he said, calling for continual partnership in between regulators, industry, financiers and teachers to construct an empowered, economically resilient India.
