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In an attempt to bring in more transparency and accountability to the mutual fund business, SEBI has come up with circular stipulating norms while payment of commission, declaration of dividends and fees charged to end investors.
SEBI has taken multiple steps towards bringing more transparency in the mutual fund business thereby protecting the interests of investors. In the circular dated 15 March 2010, the market regulator has laid down guidelines for the brokerage paid to the associates of companies, the process for new fund offers and dividend distribution and limiting the charges borne by retail investors. Key Points
Conclusion The regulator has been quite active in the mutual fund space rolling out norms for the benefit of retail investors. In fact, several policies and guidelines have been issued by regulators all over the world since the global credit crisis. Definitely, the bankruptcy of biggest financial institutions emphasises the need for greater accountability and investor education. Such initiatives need to be suitably supported with measures for increasing financial literacy in the country. Only then, the significance of these measures can be understood by the general public and would result in greater reach for mutual funds in India.
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