Mumbai: Mutual fund houses have welcomed market regulator SEBI's decision to quiz heads of the fund houses for non-performance saying it will increase their accountability.
"I think this is a welcome step. It should lead to accountability on the part of fund houses for non-performance and will also encourage them to perform better," HDFC Asset Management Company managing director Milind Barve told reporters on the sidelines of a CII summit on MF here.
SEBI Chairman U K Sinha Thursday said it is concerned about non-performance of MF schemes and will probe their non-compliance with the stated investment objectives.
The regulator said funds performing poorly over long periods of time needed to answer not just to unit holders, but also to the regulator.
"It is a cause of concern. There are at least 9 fund houses' schemes which have underperformed and some have since inception. These schemes failed to match returns of their benchmark index. SEBI is considering questioning CEOs and fund managers of the mutual fund schemes, which are not performing over a long-term basis since inception," Sinha told reporters.
Other fund houses have also echoed similar sentiment.
"I think, it is a very good thing. We have to be benchmarked and performance will be the best indicator," Tata Asset Management Company president and chief executive Sanjay Sachdev said.
He also said there will be some kind of consolidation on the products front as there are many products which are not related to investors' interest adding that this will also encourage product innovation.
On this matter, HSBC Asset Management Co Chief Executive Puneet Chaddha said it is a welcome move as fund houses will now be accountable to their investors.