The Securities and Exchange Board of India (Sebi) is planning to consider an amendment to mutual fund guidelines to link an asset management company's (AMC's) capital base with the quantum of funds managed by the fund, D R Mehta, chairman Sebi said, while addressing a seminar on mutual funds--Structural Evaluation, organised by Ficci.
The AMCs are required to have minimum capital base of Rs 10 crore, and in order to gain investors' confidence, Sebi would also look into a suggestion to link the AMC's capital base with the corpus handled by the fund, Mehta said.
The AMCs should have an adequate capital base to ensure liquidity in times of crisis and to pay off its dues, he added.
Mehta was visibly upset with the scathing criticism about Sebi's performance, and said inadequate powers had hampered the regulator's investigations and surveillance work.
"Sebi is held responsible for bearish market conditions and is also criticised for its alleged non-performance, but how do you expect us to perform in absence of adequate powers," Mehta said, and added, "We are being criticised for not exercising powers which do not rest with us."
"Indian companies should raise the quality of their disclosures and instead of accusing the regulator, should work towards improvement of their performance and further gain of investors' confidence," Mehta said.
The multiplicity of regulatory agencies had adversely affected Sebi's functioning, he said and added that woldwide, there existed a trend to move towards one regulator for the securities industry.
"There is an overlap in the regulatory role of Sebi, the Reserve Bank of India and the Department of Company Affairs," the Sebi chief said.
