SEBI Chairman U.K. Sinha was candid in his displeasure over the non-serious attitude of the bottom-ranked fund houses.

“I am very clear, that this industry needs some very serious players. Only one per cent of the assets under management (AUM) is from the bottom 10 AMCs. And this percentage has not changed substantially in the last five years. This gives an impression that we have got some non-serious players in the industry.

“If year after year, the composition remains the same, we need to rethink. Serious means you have to commit capital. I think AMCs need capital because they need to invest for long-term growth (next 5-10 years),” said Sinha.

The current net worth requirement for an AMC is Rs 10 crore.

He was frank in his speech that many fund houses had not tried to tap the hinterland despite being given incentives to do so.

“We have given incentives, very reasonable ones, to AMCs, for going beyond top 15 cities. I am sure that in the new MF policy we are going to have disincentives for those who do not meet this requirement.

Ought to be serious

“If you are a player who is not keen to go to retail.... who is not going to serve small towns, there are perhaps other avenues for you.

“You need not be an AMC, you can decide to be a portfolio manager, for example, or an alternative investment fund. If you want to be a MF player you got to be serious,” he said.

Sinha expected that the SEBI group set up for developing a long-term policy for mutual funds would submit its report in the next two to three months.

He also pointed out that fund houses were unable to tap those sources of funds which were easily accessible to unauthorised investment schemes.

satyanarayan.iyer@thehindu.co.in

raghavendrarao.k@thehindu.co.in

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