The Association of Mutual Funds (AMFI) of India has dropped the idea of acting as the industry's self- regulatory organisation, although such a system is the hallmark of mature markets around the world.
"SRO is a closed chapter... The present system is working very effectively — AMFI as a trade body, Sebi as advisory body," AMFI Chairman A P Kurian said here while interacting with the media on the sidelines of the ICC Mutual Fund Summit.
He, however, said that the body was willing to discharge select regulatory responsibilities as and when Sebi wants it to do.
AMFI was set up in 1997 and market regulator Sebi had asked AMFI to function as an SRO to perform frontline regulation.
Such a system was part of the recommendations made by the Financial Institutions Reform and Expansion Project for India.
The concept has failed at least in the mutual fund industry and it has not succeeded both in the UK and USA, Kurian said.
On the proposed variable load structure (VLS) and commission for distributors in mutual funds, he said AMFI has already submitted its proposal to Sebi.
Sebi executive director Radhakrishnan Nair said the regulator was working on VLS for mutual funds.
VLS will mention the commission an investor will pay to a distributor, which would depend on the quality and extent of service given to investors — an international practice.
The regulator was also in discussion with AMFI for introducing standardised disclosure format, valuation of assets in structured products for mutual funds, Nair added.
