(ET)
Mutual fund distributors believe the steps taken by the market regulator to increase liquidity and transparency in exchange-traded funds (ETFs) and passive funds would help attract more investors to these instruments and help grow the industry.
As per data from industry body Association of Mutual Funds in India (AMFI), over the last one year, index fund folios have more than doubled to almost 2.55 million from 1.09 million. The growth rate has been similar for ETFs as well, as the as well, as the number of folios increased to 10.8 million from 4.5 million. Distributors believe these could go up in the coming year.
The Securities and Exchange Board of India (Sebi) has mandated that every fund house shall appoint at least two market makers, to provide continuous liquidity on the stock exchange platforms. Direct transactions with the fund house will be facilitated for investors for amounts greater than ₹25 crore, which will increase liquidity.
