SEBI's new entry rules for MF industry

Market regulator Sebi will look at increasing the net-worth needed for
a firm to operate as an asset management company.The heavy
redemption pressure seen by the mutual fund industry during the
October crisis has put the market regulator on guard. We have learnt
that Sebi may go in for an upward revision in net-worth requirement
for asset management companies. Sources say the requirement may
be hiked to Rs 50 crore from Rs 10 crore.
The Sebi MF Panel also wants money-market mutual fund schemes to
be valued realistically and wants the valuation based on the day's net-
asset value (NAV) instead of the historical NAV.

The Sebi MF panel also discussed a few other issues like sectoral caps
for mutual funds — it has been noted that some MFs have invested as
much as much as 74%–97% in the banking financial services industry .

They have discussed one more thing the issue of the mismatch between
indicative yield and actual yield of fixed maturity plans (FMPs) was also
discussed. The panel also felt that there is a need for transparency in the
transaction of MFs. It feels the distribution commission which is deducted
from total investments from MFs should be taken as a separate cheque from
the investors.