Six-pt proposal to develop MF sector submitted

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FE Report
Fund managers have submitted six-point proposals to the securities regulator to sustain and develop the mutual funds (MFs) sector, officials said.
The recommendations came following the recent trend of the mutual funds, as the investors are reluctant to buy those units. Besides, some of the funds experienced poor subscription compared to other issues, which went public earlier.
A fund manager, asking not to be named, said the Association of Asset Management Companies (AAMC) handed over a letter of proposals to the chairman of the Securities and Exchange Commission (SEC).
The six proposals placed to the SEC are: facilitating the MFs with rights share offering, reducing the lock-in period imposed on the private placement of the MFs, extending the MFs' tenure, opening the limitation of private placement, increasing the quota of the MFs in IPOs, and allowing the MFs to participate in the book building bidding process.
The AAMC proposed to reduce the lock-in period for private placement of the MFs to six months from the existing one year, to increase the MFs' quota in IPOs to 25 per cent from the existing ten per cent, and to extend the tenure of the close-end MFs from the existing ten years.
A source said by taking into account the importance of the MFs, the regulator is thinking positively about some of the recommendations, submitted by the AAMC.
The letter of the AAMC said presently the market price of many of the MFs is below their net asset value (NAV) and even in some cases the units are being sold below their face value.