Securities and Exchange Board of India's chairperson Madhabi Puri Buch during an event in Mumbai said, that the Association of mutual funds in India should form an ethics committee so that action is taken against misdemeanor by individuals.
She also said that the industry has to regulate itself to handle individual misdemeanor or SEBI will have to step in.
"Industry must regulate itself when it comes to individual misdemeanors, or SEBI will have no choice but to step in", said Buch. As per Buch, the biggest risk to the growth of the mutual fund industry is individual misdemeanor.
This comes, months after the market's regulator forbid the Axis Mutual Fund's former dealer Viresh Joshi, along with 20 others, from the capital markets in a case of alleged front-running of trades.
In the event, Madhabi Puri Buch also expressed confidence in the industry's potential to expand from its current size of Rs 40 lakh crore to around Rs 100 lakh crore.