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ARTICLE · 01 SEPTEMBER 2023

AMC Sponsors – MF Regulations Come Of Age

Touchstone Partners
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The assets under management (AUM) of the Indian mutual fund (MF) industry have increased significantly by over 80% during the last five years to reach USD 475 billion for FY 2023.

IndiaFinance and Banking
Karam Daulet-Singh
Karam Daulet-Singh
Yashasvi Mohanram
Yashasvi Mohanram
Vaishnavi Sankar
Vaishnavi Sankar
Niharika Rozwal
Niharika Rozwal
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Key Takeaways

  • Following the insurance regulator IRDAI's lead, SEBI has now amended the SEBI (Mutual Funds) Regulations 1996 to expressly permit PE funds to sponsor mutual funds.
  • The updated MF framework goes a step further than the IRDAI's insurance regulations by providing for "disassociation" of sponsors as well as AMCs becoming "self-sponsored".
  • While a few niggling concerns remain, the changes are long overdue and much needed.

State of Play

The assets under management (AUM) of the Indian mutual fund (MF) industry have increased significantly by over 80% during the last five years to reach USD 475 billion for FY 2023. However, with an AUM to GDP ratio of under 15%, the sector continues to remain severely underpenetrated. Despite the vast potential for growth, the MF industry has been historically dominated by large Indian banks and corporates.

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