The markets regulator will also consider reducing the total time taken forcompletion of formalities for new mutual fund schemes from the present 90days to 42 days and getting asset management companies to publish theirbalance sheets.

Speaking at the sixth annual seminar on mutual fund industry organised bythe UTI Institute of Capital Markets and the Association of Mutual Funds inIndia (Amfi), Sebi chairman Devendra Raj Mehta said these issues wouldshortly be taken up on October 16 by the Sebi-appointed advisory panel onmutual funds headed by BG Deshmukh.

Mr Mehta said currently, mutual funds disclose their portfolios every sixmonths, but each mutual fund tends to do this according to its own format."We need to standardise the format and this is going to be done", the Sebichairman said.

On the structure of the mutual funds, the Sebi chief said the currentstructure, that of a sponsor, a board of trustees and an asset managementcompany (AMC) may need to be reviewed in favour of a corporate structure toprovide "greater flexibility" of operations for mutual funds. "This issuehad earlier been discussed by the PK Kaul committee set up by Sebi. We aretaking it to a Sebi panel again", he said.

Among other things, the Sebi chairman said mutual funds should have a codeof conduct for implementing the best practices. "We have one for Sebiofficials, but there should be a code for Sebi plans steps to streamline MFindustry intermediaries", he said.

Dwelling on the important issue of investor education, Mr Mehta said thatseveral mutual funds had unclaimed funds lying with it, which could be usedfruitfully for the purpose. "I am told SBI Mutual alone has about Rs 100crore lying unclaimed. This can be used for investor education", he said.

Lauding the efforts of mutual funds as the "best defence against thevagaries of the market", the Sebi chairman said the importance of mutualfunds was evident from the fact that UTI alone had about 5 crore investoraccounts and that was growing. "But this is not enough. The industry has togrow much more", Mr Mehta said.

"Mutual funds have been given a great degree of operational freedom, but arerequired to adhere to a higher level of compliance. There is an apparentcontradiction in these two, but this should happen."

Commenting on market volatility, the Sebi chairman said all markets werevolatile, but the key issue for the investor would be market safety."Volatility is also an important issue, but the key factor is whether themarkets are safe. In that respect, our markets are considerably safe", hesaid.

THE NEW RECIPE

* Funds' portfolios to be disclosed in standardised format
* Total time taken for completion of formalities for new MF schemes to bereduced from 90 days to 42 days
* Unclaimed money lying with funds to be used for investor education
* Structure of funds likely to change from present three-tier framework
* Balance sheets of AMCs to be disclosed