Mumbai: SEBI chief Madhabi Puri Buch in an event hosted by SBI took a tough stance on retail futures and options trading calling it a macroeconomic issue and not just a microeconomic issue concerning retail investors. The SEBI chief said that it was time to track whether household savings were funnelled into speculative trade instead of actual capital formation via capital market investment.
However, she sought to calm concerns related to market valuations again stating that there were no regulatory concerns around it. Speaking on reports about a new asset class, Ouri Buch said MFs can devise the new investment instrument to also offer derivatives, carving a safe space for these trades, instead of wider unchecked speculation. According to SEBI data, around 89 per cent retail investors lost money in equity F&O derivatives trading.
On MF misselling by finfluencers
The MF distributor is a mutual fund’s agent, said Ouri Buch, adding that the mutual fund is liable if the agent promises something that the fund is not promising to do. SEBI is taking action against AMCs instead of the distributors in cases of potential misselling by influencers, she added.
The incidental advice given by a distributor associated with AMFI regarding any F&O transactions is not allowed, the SEBI chief reiterated.
SBI free to distribute own MFs
Very large benchmark funds are “unnees-bees” (19-20 or more or less similar) in terms of their performance, said the SEBI chief. If an entity decides we will only sell our funds among these 19-20, I see no problem with it, she added.
Brand associations are an accepted mode of operation for funds. Nothing wrong with SBI exercising its brand might, she added. “If SBI has the might of their distribution, why should they not use it? Is there something wrong?” said Buch in a rhetorical manner.
However, Puri Buch warned that If a particular mutual fund is not performing and the banks sell it, it tantamounts to misselling. “That is something the system has to ensure does not happen. I am sure SBI group takes care of that very well… I am very confident of that,” said Puri Buch.
SEBI chief Madhabi Puri Buch warned that derivatives trading had become a macroeconomic issue since it concerned investors’ savings. SHe added that SEBI was urging a new investment class to bring derivatives under the MF fold. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
