Bangalore: U.K. Sinha, Chairman of Securities and Exchange Board of India (SEBI), has instructed Mutual Fund (MF) organizations to decrease their number of products and schemes and merge similar ones, as reported by R. Srividhya of MyDigitalFC.com.

Sinha quoted, “SEBI has been encouraging mutual fund companies to launch fewer number of new schemes, unless, such type of a scheme does not exist otherwise. We are also encouraging them to merge schemes that are almost similar to reduce the number of products in the market and help customers choose the right product.” SEBI has asked MF companies to decrease their product offerings as too many schemes tend to confuse investors.

According to Association of Mutual Funds in India (AMFI), 2011 saw a total of 1,151 MF schemes in the market when compared to 918 MF schemes in 2010. However, increase in the number of schemes had no effect on the value of the stocks. On the contrary, the value of schemes declined from 21,46,660 crore in 2010 to 15,42,293 crore in 2011.

SEBI is deciding upon dropping the number of days needed by stocks to be listed in the stock exchanges, post an Initial Public Offering (IPO), from 12 days to a lesser period of time in order to facilitate trading of stocks by investors. Sinha says, “We have set up an IPO review committee to look into all the aspects of an IPO. The committee will take some time to come out with its results but it will be an extensive report, keeping in mind investor interest.”

Reserve Bank of India (RBI), SEBI, and Insurance Regulatory and Development Authority (IRDA) are jointly developing strategies for investor regulations to familiarize investors regarding various schemes. SEBI is also planning upon inculcating an understanding of finance among school children by making it a part of curriculum. Sinha also said, “Officials from SEBI and the Central Board of Secondary Education (CBSE) have spoken to the ministry of human resource development to make financial literacy a part of the curriculum in schools. The idea is to build awareness about the issues and opportunities in the financial market, at a young age.” Authorities will test their demo programmes on higher secondary schools before implementing them in all CBSE schools.