Sebi proposes allowing PE funds to become sponsor of mutual fund

By Express News Service

MUMBAI:  The Securities and Exchange Board of India (Sebi) on Friday proposed allowing private equity (PE) funds to sponsor a mutual fund house. As per the regulator, PE funds can bring in strategic guidance and talent to fuel growth of the industry. 

In its consultation paper, a Sebi-constituted working group proposed alternative set of eligibility criteria to enable PE funds, which don’t qualify based on the current requirement, to act as sponsors of mutual funds (MFs) and suggested to strengthen the existing eligibility requirements to ensure that only high-quality entities qualify.  

“The Working Group noted PE with significant capital can invest in technology, bring in strategic guidance and good talent to fuel growth and innovation and expand presence of MFs including driving inclusive growth,” noted the paper. “PE may provide constructive competition to the current entities in the industry and improve value to investors.”