Bhave, who was speaking at a Confederation of Indian Industries (CII)-organised mutual fund summit, said some of the regulations related to mutual funds served its purpose when UTI was the only player in the market. Now, the market regulator will look at revamping rules governing the mutual fund industry.

Data of all shareholders, irrespective of their holding of shares in various companies, resided in one place called a depository. "Such a platform should also exist for mutual funds," said Bhave.

Currently, some distributors refund part of their commission to investors to attract more inflows, but this is illegal, Bhave said, adding that Sebi will look at legalising the same. This would lower costs in investing into mutual funds.

Insurance companies pay around 40 per cent commission to agents for selling unit-linked insurance products (ULIPs), while mutual fund distributors get 3-4 per cent.

The Association of Mutual funds of India (AMFI) had sought for a level playing field, seeking permission to offer commission to distributors in line with the insurers.

Sebi also plans to set up an advisory committee for mutual funds within a month. This committee would be on the same lines as those already existing for the primary and secondary markets.

"We will get advice from participants and investors about the issues bothering them and also about the policy framework required," Bhave said.

The committee would look into both the short-term as well as long-term issues, which needed to be addressed.

Bhave also said that Sebi will hold a workshop in the next two months under the aegis of NISM to address issues related to the role of mutual fund trustees in order to make it more effective. Bhave urged the mutual fund industry to re-look at the model in which they operate.

"We have received complaints from investors in areas where redemptions are handled improperly. No attention is paid to the investor when he is going out since the focus is more on investors coming in," said Bhave. Investors have also complained about the exit routes provided by fund houses at the time of redemption, he said.