Market watch-dog, Securities & Exchange Board of India (Sebi), is in the process of revising rules for mutual fund trustees according to Sebi Chairman M Damodaran.
The trustees should take more responsibility, Mr Damodaran told reporters while addressing Confederation of Indian Industry Mutual Fund Summit 2007, in Mumbai, on Wednesday.
Mr Damodaran said Sebi would shortly convene a meeting of trustees of mutual fund houses in order to entrust them with greater responsibilities. “We will shortly convene a meeting of the trustees. We are in the process of writing revised regulations entrusting the trustees with higher levels of regulatory powers,” he added.
Exhorting Association of Mutual Fund in India (AMFI) to play the role of a self-regulatory organisation (SRO), he said, it was rightly placed to perform this duty.
Given its skill-sets, AMFI could become the first SRO in this sector, he said. “If you take AMFI as a trade body that represents asset management companies, I believe that it is uniquely positioned to play this role and to be the SRO,” Mr Damodaran said.

Investor fund
Stating that an investor protection fund to save gullible investors from defaulting member brokers would be set up by early July, Mr Damodaran said the Sebi Act needs to be amended ahead of setting up such a fund. Indications were that the changes will be carried out by July.
Investor protection fund will be a consolidated fund that will be created from the money collected through fines and penalties.