Market watchdog Sebi today said it will avoid turf war with other regulators while finalising norms to allow mutual funds to launch pension products.
"We will avoid all turf war (between regulators). After we get the stakeholder recommendation we will go to the board and then take a final call," Securities and Exchange Board of India (Sebi) Chairman UK Sinha said here.
He was speaking to reporters after meeting Planning Commission Deputy Chairman Montek Singh Ahluwalia.
On the meeting with Sinha, Ahluwalia said, "It was a courtesy call, we did not have a structured discussion". Meanwhile, the Sebi Advisory Committee on Mutual Funds will meet tomorrow to discuss the issue of allowing pension money into MF industry.
"Sebi will take a direction towards reviving the mutual fund interest in the country and some long-term and medium-term measures will be contemplated (in the Advisory Committee meeting)," Sinha added.
While the mutual funds are regulated by Sebi, pension falls under the purview of Pension Fund Regulatory and Development Authority (PFRDA).
Earlier, the regulation of Unit-Linked Insurance Plans (ULIPs) created a turf was between Sebi and Insurance Regulatory and Development Authority (IRDA) forcing the Finance Ministry to intervene and resolve the issue.
The mutual fund industry, which is going through a bad patch on account of declining investor interest, wants to launch pension products to attract retirement money. However, taxation and other regulatory issues are delaying the process.
The Sebi meeting comes close on the heels of Prime Minister Manmohan Singh's statement last month that the MF industry is facing problems that needed to be resolved.
Sebi has allowed the mutual fund industry to come out with pension schemes and is in touch with the Finance Ministry to sort out the taxation issues.
The current provisions of the Income Tax Act makes pension products of insurance companies eligiblefor tax deduction benefits. However, no such benefits are available for MF schemes. Industry experts said Sebi would have to modify regulations to enable mutual fund houses to launch pension schemes.
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