Market regulator the Securities and Exchange Board of India (Sebi) will soon come out with guidelines for foreign investors undertaking direct investments in mutual funds, a senior official said today.
"Sebi will issue the guidelines allowing foreign investors to invest in mutual funds shortly. We are working with the Reserve Bank and the Finance Ministry (for allowing foreign investors' entry into mutual funds). It is a matter of weeks and not months," Sebi Executive Director (Institutional Investment Management) K N Vaidyanathan told reporters here.
In Budget 2011-12, Finance Minister Pranab Mukherjee had announced to allow foreign investors to invest directly in MFs.
At present, foreign institutional investors (FIIs) and NRIs are allowed to invest in MFs. However, fund houses would have to ensure know-your-customer (KYC) norms before seeking investment from overseas investors.
Vaidyanathan further said the proposal would definitely give a boost to domestic asset management companies.
The average assets managed by the MF industry, consisting of 40 players as of December 31, 2010, was Rs 6,75,377 crore.
