Mumbai, Nov 20: Securities and Exchange Board of India (SEBI) on Thursday, Nov 20 gave a clean chit to the Mutual Fund operations in India and said the current crisis facing them was more of liquidity nature and not due to investment decisions.
Speaking to newsmen on the sidelines of an Indo-Malaysian forum on Capital Market here, SEBI chairman C B Bhave said SEBI would take a little more time to come out with a paper on change of rules for Foreign Institutional Investors (FIIs). He said it would be a comprehensive review of the rules of FII investments in India and would take some more time before the consultative paper is out for suggestions.
Ruling out any immediate ban on short selling due to the highly volatile conditions in the capital market, he said the FIIs were net sellers in the situation. This was not unique to India alone, as bourses elsewhere in the world were also similarly problem and it was but natural for these entities to get easy liquidity from the capital market when the conditions back home was dicey, he said.
The FIIs were also buying in these volatile days, but they have emerged net sellers, he added.
He said the emerging economies are mature enough to have intra regional investments within the developing countries and was in favour of such cross border investments taking shape in large numbers in the future. The idea received a strong support at the one-day forum.