sebi
Published on 1 July 2025
Enhancing Self-Regulation in the Mutual Fund Industry: Insights from Sebi's Amarjeet Singh
Why Is SEBI Suddenly Talking So Much About Self-Regulation?
There’s a quiet but serious message coming out of the financial corridors these days—SEBI wants the mutual fund industry to take more responsibility for itself. Not just follow the rules, but actually step up and behave like grown-ups. And at the heart of this call is a simple idea: regulation has its limits.
“Rules Help, But They’re Not Enough”
When Amarjeet Singh, a whole-time member at SEBI, stood up to speak at the Moneycontrol Mutual Fund Summit 2025, he didn’t sugarcoat anything. “Regulations can do up to a point; beyond that, self-regulation becomes crucial,” he said.
That might sound like jargon. But what he really meant was: It’s time for the industry to police itself, not just wait around for the regulator to come knocking.
Sure, SEBI can issue circulars, fine wrongdoers, and tighten the screws. But the real protection for investors? That has to come from inside—from how mutual funds behave day to day, from how honest they are with investors, and from how seriously they take trust.
Following the Rulebook Isn’t Enough Anymore
Amarjeet Singh also made a critical point that’s easy to miss in a checklist-driven world: just complying with regulations doesn’t necessarily mean investors are being protected. You can tick every box and still miss the bigger picture.
What SEBI is pushing for is a mindset shift—from mechanical compliance to meaningful outcomes. That means fairer returns, cleaner practices, and a culture where protecting the investor comes first, not last.
Cleaning Up From Within: Front-Running & Other Risks
One of the red flags SEBI has been watching closely is front-running—where someone trades based on insider knowledge of big fund movements, hurting ordinary investors.
Singh didn’t just name the issue—he called out the responsibility. It’s not enough for SEBI to play the watchdog. Mutual fund houses themselves need internal systems that detect, report, and prevent these shady practices before they hurt investors.
Because let’s face it: Reputation damage is real, and it spreads fast. If the industry doesn’t act now, it risks losing the very trust it’s worked so hard to build.
How Much Has the Industry Grown?
To understand why SEBI is shifting gears now, just look at how far mutual funds have come in the past decade. Singh laid out the numbers, and frankly, they’re staggering:
| Metric | 2014 | 2025 |
|---|---|---|
| Assets Under Management (AUM) | ₹8.25 lakh crore | ₹72 lakh crore |
| Number of Schemes | 810 | 1,760 |
| Monthly SIP Contributions | ₹3,000 crore | ₹26,700 crore |
| Share from B-30 Cities | 9% | 18.4% |
| Retail AUM Share | 23% | 28% |
| Distributors | 70,000 | 2,00,000+ |
| Investor Folios | 4.2 crore | 23.4 crore |
That’s not just growth—it’s a full-blown transformation. In less than a decade, mutual funds have gone from niche financial tools to mainstream investing vehicles for everyday Indians. And with that reach comes responsibility.
So, What’s Driving All This Growth?
Several factors have come together over the last few years to push mutual funds into the mainstream:
- Mobile-first investing: Apps and online platforms made it simple—even for someone in a Tier-3 town—to start with as little as ₹500.
- A booming market: A long stretch of positive returns made people sit up and take notice.
- Better regulation: SEBI’s work on transparency and fair play made mutual funds safer and more predictable.
- Investor awareness: Campaigns like “Mutual Funds Sahi Hai” did the heavy lifting in changing perceptions—especially among first-time investors.
What’s the Road Ahead?
In Singh’s parting words: “Growth is great, but it must be right and responsible.” That’s the heart of the message.
It’s tempting for fund houses to chase higher AUMs, more SIPs, and shiny new schemes. But if the industry loses sight of trust, transparency, and investor-first thinking, it risks undoing everything it’s built.
The call for self-regulation isn’t a threat—it’s a wake-up call. The mutual fund industry is no longer just growing. It’s becoming central to how India saves and invests. And that means fund managers and distributors now carry the weight of real public trust.