The Securities and Exchange Board of India (SEBI) is endeavor a complete evaluation of mutual fund laws to make them more investor-centric and industry-friendly, a senior official stated on Saturday (June 21, 2025).
“We are reviewing the entire mutual fund regulatory framework to enhance ease of doing business for all stakeholders, including the regulator,” SEBI government director Manoj Kumar stated on the seventeenth Mutual Fund Summit organised by the Indian Chamber of Commerce (ICC) right here.
Existing laws governing the sector are among the many lengthiest and require simplification to preserve tempo with evolving investor wants and industry improvements, stakeholders stated.
“The process has started and soon we will come out with draft regulations for feedback and consultation process before it is finalised,” Kumar stated with out giving any timeline for the rollout of the brand new rules.
Kumar outlined the regulator’s strategic roadmap to strengthen India’s securities market, with mutual funds positioned as a vital pillar in fostering inclusive monetary progress and investor safety.
A session paper on laws which governs advisory capabilities in mutual funds can be within the pipeline.
Addressing the occasion, Kumar stated India has undergone main market transformations beneath SEBI’s stewardship.
These embrace the shift to an digital buying and selling ecosystem in 1998, adopted by reaching 100 per cent dematerialisation of shares, making India the one jurisdiction globally to achieve this.
“The third transformation is unfolding now through the mutual fund revolution,” he stated, calling it a cornerstone of SEBI’s “optimum regulation” strategy, one which seeks stability among the many pursuits of the regulator, the industry, and buyers.
While India’s mutual fund industry has crossed Rs 72 lakh-crore in AUM and month-to-month SIP contributions have touched Rs 28,000 crore, the investor base stays restricted to simply 5 crore in a inhabitants of 140 crore, Kumar identified.
SEBI can be actively reviewing scheme categorisation norms to make them more intuitive for buyers, whereas making certain all choices stay “true to label” to stop mis-selling.
To supply wider alternative to buyers, SEBI has accepted a brand new product class, referred to as SIF, geared toward buyers with ticket sizes between Rs 10 lakh and Rs 50 lakh.
Mutual funds had been chosen to handle these merchandise given their established governance and dealing with of retail flows.
Parallelly, SEBI has opened quicker registration home windows for Portfolio Management Services (PMS) and Alternative Investment Funds (AIF) with related choices.
Addressing industry considerations over stress check disclosures for mid- and small-cap funds, Kumar reaffirmed SEBI’s disclosure-based regulatory mannequin, stressing that knowledgeable buyers are central to market resilience.
While he acknowledged that some disclosure necessities could appear burdensome, he assured stakeholders that SEBI stays open to suggestions and streamlining processes.
He urged the industry to keep away from conditions that warrant regulatory intervention, saying, “Our goal is not to disrupt but to allow business to thrive.” Highlighting the untapped potential in jap India, Kumar stated SEBI views West Bengal and the Northeast as strategic areas for mutual fund growth, underscoring the necessity for focused penetration efforts.
Echoing this imaginative and prescient, AMFI chief government V N Chalasani stated India is transitioning from monetary inclusion to monetary well-being, the place saving neatly and investing correctly will allow sustainable wealth creation.
He cited the exponential progress of mutual funds post-2017, following SEBI’s investor schooling mandate, which helped increase the investor base and enhance monetary consciousness.
However, Chalasani identified that India’s mutual fund AUM nonetheless kinds solely about 20 per cent of GDP, in contrast to a world common of 65 per cent.
He harassed the necessity for deeper monetary literacy, particularly in Tier 3 and 4 cities, the place AMFI is focusing by means of faculty and college programmes, distributor growth by way of India Post, and new product improvements geared toward mid-income buyers.
“Every Indian can evolve from a saver to an investor and ultimately a wealth creator,” he stated, calling for sustained collaboration between regulators, industry, educators and buyers to construct an empowered, financially resilient India.
