The Securities and Exchange Board of India (SEBI) floated a consultation paper on January 13, seeking public opinion on four important topics related to the sponsorship of mutual funds in the country. The consultation paper covers the following points:
- Allowance of private equity funds to become sponsors:
SEBI is seeking public opinion on whether private equity funds should be allowed to become sponsors of mutual funds.
- Strengthening existing criteria for setting up sponsors:
SEBI is also seeking views on whether the criteria for setting up sponsors should be strengthened to ensure better governance and accountability.
- Allowance of new types of sponsors:
The consultation paper also asks for opinions on whether new types of sponsors, such as those without traditional net worth or profitability requirements, should be allowed in the market.
- Requirement of sponsors for well-established and long-running asset management companies:
Finally, SEBI is seeking views on whether sponsors are required at all for well-established and long-running asset management companies.
The consultation paper is open for public comments until February 28, 2023. The feedback received will be used by SEBI to formulate new guidelines and regulations for the sponsorship of mutual funds in the country.
The move by SEBI comes as a part of its ongoing effort to improve the regulatory framework for the mutual fund industry in India. The consultation paper is expected to provide valuable insights into the current state of the sponsorship landscape and help SEBI in making informed decisions for the future.
In conclusion, the consultation paper floated by SEBI is an important step towards ensuring the stability and growth of the mutual fund industry in India. The public is encouraged to provide feedback and contribute to the development of the industry.