Sebi may allow MF distribution via e-commerce

To boost penetration of mutual funds across India, Sebi is planning to use the e-commerce platforms for distribution of mutual fund schemes.

Also, to bring in better disclosure in the ratings industry, the markets regulator is working on some changes to current rules for rating agencies.

A committee under Infosys co-founder Nandan Nilekani is working to look at how e-commerce platforms could be used to sell mutual fund schemes and it is expected to submit its report soon, Sebi chief U K Sinha said. Following the committee's report, Sebi will issue rules that will allow e-commerce platforms to sell mutual funds.

Sinha was speaking at industry body Ficci's annual capital markets conference.


"Hopefully in the next couple of months we will be coming out with a new set of regulations for distribution of mutual fund products," Sinha said. Terming the very thin spread of mutual fund investments in India as ""not a happy situation," Sinha said that the regulator aimed to make buying and selling mutual funds "easy and cost effective." With the introduction of e-commerce platforms for mutual fund distribution, Sebi would be able to bring about an entirely "new paradigm in distribution of mutual funds", he said.

Sinha said Sebi was looking into the processes ratings agencies follow when they rate companies.

The market regulator has been in regular dialogue with ratings agencies since the questionable default of auto ancillary company Amtek Auto that impacted investors in one of the foreign mutual funds.

"We had dialogues with ratings agencies and you can expect additional guidelines soon," Sebi chief said. The regulator was also looking at the regulations guiding debenture trustees, their disclosure structures mainly how they inform investors.

In the commodity space, Sinha said that since it merged FMC, the commodities futures regulator, with itself, the market has been seeking introduction of products and also to allow more participants like foreign portfolio investors (FPIs) to enter the segment.