It is strange but in an advisory committee, half of whose members were outside of the industry, did not think it fit to propose charging above the existing limits for schemes which outperform benchmark indices. This would have incentivised fund managers to be more diligent in stock picking. But the committee did make a good proposal of schemes ploughing back collection from exit loads, which is imposed on investors exiting a scheme within a specified period from purchase date, to the scheme instead of giving it to the AMC.
The committee's proposal of giving AMFI a regulatory role for governing mutual fund distributor, has serious implications. It has the potential to invoke demands from other sections of the securities market, such as stock exchanges seeking regulatory role for governing their brokers. Whether Sebi should outsource regulation responsibilities to an industry body which has a vested interest in keeping their agents happy is something that should be avoided. Sebi needs to tread carefully on all the proposals coming from the committee.