SEBI to simplify MFs` new fund offer documents

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Mumbai: The market regulator Securities and Exchange Board of India (SEBI) is planning to simplify the offer document (OD) of mutual funds' (MF) new fund offerings (NFOs). The move will help MFs take investment decisions easier, reported Business Standard.

The move coincides with SEBI Wednesday's circular mandating mutual funds to spend at least five seconds for displaying messages to warn investors on the risks involved in mutual fund investments.

The regulator has reportedly held two rounds of discussions with the Association of Mutual Funds in India (AMFI), the body for mutual funds in the country. Sources said that the proposal is likely to be referred to the SEBI board shortly. The rule will reduce the costs and time in preparing and filing offer documents with SEBI.

"Once implemented, the rule will be in the interest of investors. They can take informed decisions by going through a document which is lean and relevant," said Vineet Potnis, chief marketing officer of DBS Cholamandalam Asset Management Company.

SEBI recently proposed fast-track clearances for fixed maturity plans (FMPs), investing only in short-term debt instruments.

About 70 percent of the mutual fund offer documents are filed for closed-ended schemes such as FMPs and interval schemes involving several series.

The Indian mutual fund industry has 33 players managing assets worth Rs 5,48,063.51 crore. Several players are awaiting the SEBI?s approval to enter the mutual funds business in India.

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