| The Securities and Exchange Board of India (Sebi) has decided to put the issue of mutual fund products on the fast track route in line with the follow-on and rights issue offers in the equity market. |
| According to sources close to the development, this will substantially minimise the time taken for the approval and registration of new products. |
| Mutual funds need not file the prospectus everytime a they decide to introduce new products. Sources said Sebi proposes to amend Section 28 and Section 29 of the Regulation for Mutual Funds to facilitate the fast-track issuance. |
| A decision to this effect has already been taken by Sebi and after taking the feedback from the market, the final note will be put for discussion at the board meeting slated to be held next month, said sources. |
| Sources pointed out that the major shift in this approach would be working out the self-regulation model for asset management companies (AMC). |
| It will be the responsibility of the AMC to conduct the due diligence of the trustee and scrutinise compliance issues of the product slated to be launched. The AMC could then issue a certificate to Sebi for enabling the launch of such products. |
| This certificate by the AMC will then enable the issuance of such products. The registration by a mutual fund for a certain product will be valid for six months, under which different products could be launched. |
| Meanwhile, Sebi has in principle decided to waive the entry load for investors in mutual funds, who are investing directly in the market. |
| However, it will soon decide the criteria to define the mode of investments, which make one eligible to fit it into the criteria of investment done directly in the market. Currently, investments made through drop boxes and online trading facilities are reconsidered as direct investments. |
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