Fed up with the month-end rush to buy assets from banks or corporates to show growth in assets under management, some mutual funds are planning to ask the Securities and Exchange Board of India (Sebi) to mandate a system of declaring average assets throughout the month based on daily balances.
Asset management companies (AMCs) that are sponsored by institutions with huge funds at their disposal need only to borrow from their parents to show the growth in assets. Those who do not have such backing approach banks or corporates to put in money, accommodating them by whatever means possible.
And those who have neither the cash-flush parents nor the necessary wherewithal for asset shopping can only watch the show with distress.
However, it is the large funds that are planning to approach the Sebi with the suggestion to do away with the rule of month-end disclosure of assets under management. They feel that it presents a distorted picture of the scenario.
Rajesh Bhojani, head of business development, IL&FS Mutual Fund said that reporting of average assets throughout the month made sense since
