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Two new players -- Samco Securities and Equity Intelligence India -- have filed applications with the Securities and Exchange Board of India to launch their own mutual fund businesses in India.
Samco Securities is an online discount brokerage firm like Zerodha, while Equity Intelligence India runs portfolio management services (PMS) and alternative investment funds (AIF).
So far, five players including Muthoot Finance, Frontline Capital Services, Karvy Stock Broking, Trust Investment Advisors are awaiting the market regulator's nod to start their mutual fund businesses in the country.
Mumbai-based Samco Securities, which was founded by Jimeet Modi, first approached SEBI in June this year with its application.
Kochi-based Equity Intelligence India, which was founded by renowned investor Porinju Veliyath, has been waiting for the regulator's in-principal nod since January.
Muthoot Finance, Frontline Capital Services and Karvy Stock Broking had approached SEBI in March 2017, July 2017 and November 2011, respectively, to start their own mutual fund businesses. All these companies currently run mutual fund distribution subsidiaries.
Last year, Yes Bank, Fortune Financial Services and Trust Investment Advisors got an in-principle approval from SEBI to launch an asset management business. Yes Bank recently started its mutual fund business and is on the verge of hiring top officials.
According to SEBI norms, the sponsor applying for a mutual fund license is required to have been in the financial services business for five years and needs to have had a positive net worth for five years.
The sponsor should have earned profits in three of the previous five financial years, including the latest year. SEBI conducts an on-site due diligence of the sponsors before approving any application.
Currently, there are 42 active mutual fund houses in the country, managing assets worth over Rs 23 lakh crore in all, as on June 30.
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