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Jun 22, 2012, 09.22 AM IST
Market regulator SEBI is furious. Chairman UK Sinha has pulled up the fund managers of nine asset management companies, because over 50% of their schemes have underperformed the benchmark, reports Mitra Joshi of CNBC-TV18.
Market regulator SEBI is furious. chairman UK Sinha has pulled up the fund managers of nine asset management companies, because over 50% of their schemes have underperformed the benchmark, reports Mitra Joshi of CNBC-TV18.
UK Sinha is a man on a mission and when it comes investor protection, he's not pulling his punches.
UK Sinha, chairman, SEBI, says that there are nine fund houses where over a period of three years, 50-100% of the schemes have performed less than the scheme benchmark. SEBI is going to engage these fund managers and CEOs of those companies as why the performance of these funds on a consistent basis is not good.
Sinha's observation is based on fund performance over the last three years. But industry watchers say fund performance has to be taken in the context of market performance and that no one can win all the time.
Many fund houses also see the upcoming dialogues with the regulator as an avenue to clear up persisting issues, voice their problems, and spark off exercises that will improve the business environment.
Puneet Chaddha, CEO, HSBC Global Asset Management, says that it is right thing to do on SEBI's part to actually have a conversation with the fund to understand why they underperformed the benchmark.
Fund houses are happy that the regulator is calling for dialogues instead of a shoot-first-ask-questions-later approach and these dialogues could well work in giving the investor more insight and into how fund houses operate, and make for greater transparency.
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