India’s Mutual Fund Industry Pushes For Regulatory Flexibility To Go Global

• Mutual fund industry urges SEBI to relax Regulation 24(b) for greater global expansion flexibility.
• Key demands include easing merger and acquisition norms for AMCs.
• The regulator is reportedly reviewing the proposals for a possible overhaul.

India’s mutual fund industry has reportedly urged the Securities and Exchange Board of India (SEBI) to ease restrictive provisions under Regulation 24(b) of the Mutual Fund Regulations, seeking more operational flexibility to diversify and expand globally.

Asset management companies (AMCs) argue that the existing framework limits their ability to pursue non-core but complementary businesses, such as wealth management, advisory services, and cross-distribution of financial products, according to a Business Standard report.

Fund houses have requested broader relaxations beyond what SEBI proposed in its July consultation paper. Key demands include:

-Easing merger and acquisition norms for AMCs

-Allowing them to offer customized portfolio management for high-net-worth individuals

-Managing offshore funds without a separate PMS license

-Engaging in the global distribution of funds

Industry executives believe that AMCs have evolved from simple fund managers to multi-asset investment platforms and must not be confined to outdated definitions, the report added.

SEBI is reportedly deliberating the proposals, which could lead to a comprehensive overhaul of mutual fund regulations. Industry representatives also argue that India’s framework is more restrictive compared to global standards, where fund managers handle insurance, pension, and advisory mandates under a unified structure.

As Indian AMCs compete with global players expanding in domestic markets, experts say rationalising these restrictions is essential to ensure a level playing field and support the sector’s next phase of growth, especially as the industry’s assets under management (AUM) surpasses ₹75 trillion.