SEBI panel to discuss select mutual fund products on May 31

A committee of market regulator SEBI will consider the issue of restricting mutual funds from selling an equity product that involves betting on future prices. The SEBI Mutual Fund Advisory Committee is concerned that this is not mutual funds’ core activity and may take a decision on May 31.

Equity options is a derivative product where investors bet on future value of stocks or their indices and SEBI is against mutual funds getting into the hedging business, as it could suffer losses.

In a letter sent to all fund houses recently, SEBI had sought proposals from asset management companies (AMCs), regarding selling of equity options and an increased disclosure of their investment in this segment, sources in fund houses said.