‘NO PROPOSAL TO SEBI TO LAUNCH NEW BENCHMARK’
Dismissing media reports as speculative, the Association of Mutual Funds in India, (Amfi) on Thursday said it has neither written to the Securities and Exchange Board of India (Sebi) proposing the launch of a new index, nor has it suggested capping a stock on the index. The industry will continue to adhere to Sebi guidance on the capping of a single stock, it added.
“Referring to a speculative report in a section of the media about Amfi /AMCs proposing to Sebi to launch a new benchmark index, Amfi has clarified that it has not written to Sebi proposing the launch of new index nor capping any stock in the index. Amfi requests media houses to not publish such unverified news as this can lead to unhealthy market speculation.”
Amfi’s clarification follows media reports saying Sebi was petitioned to create a new index as fund managers were not being able to capture Reliance Industries’ performance in their portfolio due to regulatory norms. Fund house’s exposure to a single stock is capped at 10% by Sebi.
“Undoubtedly there are challenges in performance measurement as indices do not have a cap on a stock, whereas mutual fund schemes have a cap of 10 % on a stock. However, this issue needs to be settled between the fund houses and the index-calculating agencies. Globally, index-calculating agencies do prepare customised indices, which comply with investment restrictions of the fund,” Amfi said in a statement.
INDEX ISSUE NEEDS TO BE SETTLED BETWEEN FUND HOUSES AND AGENCIES THAT CALCULATE THE INDEX, AMFI SAID