Notes On Mutual Fund Industry Essay

1615 WordsFeb 28, 20167 Pages
Mutual Fund - In 2015, Indian Mutual Fund Industry has seen a fastest growth in terms of resource mobilisation i.e. 13.5 percent as compared to previous year. The net inflow during 2013-14 was ₹ 53,782 crore, which increased in 2014-15 to 92% i.e. ₹ 1,03,287 crore. The reason for such growth in Indian mutual fund industry is due to positive outlook and well-timed reforms initiated by SEBI. The policies initiated by SEBI for the mutual fund sector (A) 2014-2015 1. Increase in Minimum Net worth Requirement SEBI has increased the minimum networth requirement by fivefold, now the Asset management companies (AMCs) has required to maintain minimum networth of ₹ 50 crore instead of ₹ 10 crore for launching and managing new schemes. Infrastructure debt funds (IDFs) have been kept out of this new rule. To increase minimum networth, SEBI has given 3 years to all Asset management companies (AMCs) to comply with this new rule. Until the net worth is raised from ₹10 crore to ₹ 50 crore, only 2 new schemes can be launched by the AMCs. 2. Introduction of Seed Capital SEBI has introduced a new concept ‘seed capital’ in Indian Mutual fund industry. Under this concept, SEBI has made it mandatory for Asset management companies (AMCs) to invest 1% of the amount raised, subject to a maximum of ₹ 50 lakh in all open ended schemes and such investment shall not be redeemed during its lifetime. To comply with this new rule a time period of 1 year from the date of notification has been given.

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