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EVOLVING MARKET LANDSCAPE
The Indian mutual fund industry, governed by the SEBI (Mutual Funds) Regulations, 1996, has witnessed an unprecedented evolution over the last two decades driven by a sustained policy focus on financial inclusion, digital infrastructure expansion, and increased investor awareness. The growth trajectory has been further accelerated by the entry of retail investors from Tier 2 and Tier 3 cities, facilitated by low-cost digital platforms, simplified customer norms, and systematic investment planning becoming culturally entrenched.
However, this expansion has also revealed a structural rigidity in the regulatory ecosystem, wherein all mutual fund Sponsors and Asset Management Companies (AMCs), irrespective of investment strategy or complexity, are subject to a uniform and comprehensive set of compliance obligations. This includes stringent capitalisation norms, expansive governance frameworks, granular disclosure requirements, and exhaustive reporting and audit cycles, originally designed to mitigate risks associated with actively managed, high-discretion investment vehicles.
THE IMPERATIVE FOR REGULATORY DIFFERENTIATION
As per the AMFI Database1, the mutual fund industry’s Assets Under Management (AUM) reached ₹65.74 lakh crore
