Sebi to unveil realty MF norms next week

Final guidelines for launching real estate mutual funds would be announced next week, according to M Damodaran, chairman, Securities and Exchange Board of India.

Announcing a slew of initiatives for the mutual fund industry, Damodaran said that norms for launching capital protection schemes would be announced in July.

The markets regulator also said guidelines for launching overseas fund schemes is under active consideration. The Association of Mutual Funds in India had submitted its recommendations for this a few weeks ago.

Addressing a CII seminar, Damodaran questioned the need to have so many new fund offers. Before launching any new fund offerings, fund houses should first verify that the ambit is not already covered by one of their existing, older offerings, he said.

Stressing on the need for greater accountability by mutual fund houses, Damodaran said while incidences of mis-selling have substantially reduced, they have not been eliminated entirely either.

The regulator also called for a greater role on the part of trustees and said more power should be given to them.

"We need to identify the role of trustees because they safeguard the interest of the investors," he said. The issue of trustees being part of more than one asset management company also needs to be examined, according to him.

On the markets, Damodaran said mutual funds on Thursday are far more significant players in equity markets.

Referring to the volatilty in the market now he said, "I am not concerned about anything. The minute we get concerned we have a problem. We look at what happened and take appropriate action where it's warranted."

"Why do you believe market manipulation happens only when markets go down? It can happen when markets go up. I believe we are paid at the end of every month to check manipulation on a continuing basis notwithstanding where the market is," he added.