Cos put MF entry plans on back burner
Tuesday, 13 July 2010
NEW DELHI, July 12 (PTI): Nearly two dozen firms awaiting Sebi nod for setting up mutual funds now seem to have had a change of mind and they are dilly-dallying on the matter.
Many of these applicants had to furnish more information, but they are delaying getting back.
Industry players blame the low margins and tough rules for turning the once-lucrative mutual funds business into sour grapes, wherein existing players are contemplating selling out and applicants no more being keen on securing approvals.
There are about three dozen fund houses operating in the country, but business has come under pressure in recent months, with June alone seeing a 16-per cent dip in total assets under management.
Besides, there are about a dozen more entities registered with Securities and Exchange Board of India (Sebi).
On top of it, as many as 24 applications are pending with Sebi for entering this businesses, but the processing status data available with Sebi indicate lack of interest from most of those who had earlier announced mega plans to enter the business.
Out of these applications, 18 have been asked to furnish further information and such pending applications date way back to 2006.
"The corporate houses are shying away from entering the asset management business as they are finding them less attractive with Sebi now turning its focus to making it investor friendly," a senior industry official said.
Many of these applicants had to furnish more information, but they are delaying getting back.
Industry players blame the low margins and tough rules for turning the once-lucrative mutual funds business into sour grapes, wherein existing players are contemplating selling out and applicants no more being keen on securing approvals.
There are about three dozen fund houses operating in the country, but business has come under pressure in recent months, with June alone seeing a 16-per cent dip in total assets under management.
Besides, there are about a dozen more entities registered with Securities and Exchange Board of India (Sebi).
On top of it, as many as 24 applications are pending with Sebi for entering this businesses, but the processing status data available with Sebi indicate lack of interest from most of those who had earlier announced mega plans to enter the business.
Out of these applications, 18 have been asked to furnish further information and such pending applications date way back to 2006.
"The corporate houses are shying away from entering the asset management business as they are finding them less attractive with Sebi now turning its focus to making it investor friendly," a senior industry official said.