Sebi to quiz mutual funds over consistent non-performance

The Securities and Exchange Board of India (Sebi) has raised concerns over the performance of some schemes in the Rs6,64,000-crore mutual fund industry.

Sebi chairman, UK Sinha said in Mumbai yesterday that this was a cause for concern and the regulator would engage the fund houses over the issue and seek explanation as to why on a consistent basis their schemes had failed to perform.

According to the Sebi chief, there were at least 18 fund houses where schemes had underperformed or failed to match returns of their benchmark indices.

''Some AMCs' (asset management companies) schemes have underperformed since inception. Sebi will engage with them and ask what measures they are taking to address the issue. We will perhaps review their performance on a half-yearly or annual basis,'' Sinha said at the annual Confederation of Indian Industry mutual fund summit.

The regulator also voiced concern about some AMCs flouting existing norms. End on this, Sinha said losses of certain mutual fund schemes were being transferred to other schemes. He cited the case of a bank investing in schemes of a mutual fund from term deposits of the lender.

''Sebi can't be silent on these matters,'' he said.