Addressing the sixth annual seminar on mutual fund industry here today, Mr Sinha said that the research base of the mutual funds should be strengthened to bring the untapped investment under their management of mutual funds and said that the association of mutual funds in India can play a major role into it.

The Finance Minister said that there is need of better research by fund managers before taking investment decisions in the changed scenario and advised them to adopt scientific manner while taking investment decisions.

Referring to the findings of the National Council for Applied Economic Research (NCAER), the Finance Minister said there is a great investor potential in the country as the survey revealed that only 8 per cent of total population has invested in stock market and there is an enormous opportunity to increase the share of domestic savings.

The Finance Minister advised the mutual fund industry to extend their reach to the rural area of the country where large amount of investment potential is lying idle. "Many people from remote areas of the country like to trust mutual fund, but the reach of MFs is still limited," he commented.

Mr Sinha also stressed for creating depth in stock market. "We must create depth in the market." The FM said and added that the depth can be created only when mutual fund succeeds in tapping the potential investment into the market by extending their reach to the rural areas.

Sebi Chairman D R Mehta, who also spoke on the occasion, revealed in his speech that the various recommendations of Deshmukh Committee are under consideration of Sebi board and the regulatory board is likely to approve them in their next meeting.

The Deshmukh Committee has recommended for a change in structure of mutual funds. Besides that it has also recommended for a code of conduct for the mutual fund industry. The Sebi is awaiting a draft of code of conduct from Association of Mutual Funds in India (Amfi) and may finalise the code of conduct very soon, he said.