Sebi Chairman Ajay Tyagi on Monday said that the markets regulator is actively looking at recategorisation of midcap and smallcap stocks for the mutual funds.
Sebi chief had made a similar comments earlier this month. To ensure uniformity, Sebi in 2017 issued a list defining largecap, midcap and smallcap companies.
The list is being prepared once in six months by industry body AMFI in consultation with Sebi and stock exchanges. Besides, to help investors make accurate comparison of schemes, Sebi categorised and rationalised mutual funds schemes. Active fund managers claimed the categorisation had taken away their flexibility to invest, resulting in money flowing into a set of stocks, impacting MF scheme performances. The whole process was completed by mutual fund houses by June 2018, in which some schemes were merged while a few others saw changes in fundamental attributes. On Karvy issue, Tyagi said that steps required to be taken, will be taken, adding that investors’ due can be returned in a timely manner-- that is the first priority. He said that in case of Karvy's dispute with lenders, the latter have recourse to proceed in the court of law and that Sebi not really examine whether Karvy is repaying banks. On NSE's IPO, Tyagi said Sebi was examining the orders passed against the members last year.
Speaking on his journey at Sebi, Tyagi said that it was a deep dive job rather than being on the surface. “We have believed in public consultation, and consultations with the stakeholders.
What we did we did cautiously. For an organisaiton like market regulator, there will always be challenges,” he said. Earlier in the day, Sebi said there will be segregation of advisory and distributing activities for investment advisers, at client level to avoid conflict of interest, adding that an individual investment adviser cannot provide distribution services. In a press release, the market regulator said it will introduce upper limit on the fees charged to investors by investment advisers. Sebi said that there will be enhanced eligibility criteria for registration as an investment advisor including net worth, qualification and experience requirements. The existing individual investment advisers will be grandfathered from complying with the enhanced qualification and experience.
There will be a mandatory agreement between an investment advisor and client for key terms and conditions, it said.