The Securities and Exchange Board of India (Sebi) is planning to clamp down heavily on mutual fund (MF) distributors. The distributors would be under regulatory framework directly or through a self regulatory authority (SRO), M Damodaran, chairman of Sebi, said on the sidelines of a seminar on 'Recent Developments in Capital Markets' organised by the Bengal Chamber of Commerce and Industry here today. "Sebi wants to ensure that MF products offered to investors are best suited for them and not distributors...any steps taken in this regard would be done through a consultative mechanism. We will be going ahead with Amfi in regulating MF distributors," Damodaran said. The MF distributors are churning investors' money from one fund to another for their personal gain, which "is resulting in distortions," Damodaran said. Besides MF distributors, Sebi is thinking of a regulatory framework for investment advisors, Damodaran said. Speaking on clause 49 of the Listing Agreement relating to corporate governance Damodaran said that in the rush to comply with the requirement, a whole lot of people have complied in form but not in substance. "We will get into all these things to check that corporate governance norms are complied in substance," Damodaran added.
