AMFI denies making proposal to SEBI to launch new benchmark index

The Association of Mutual Funds in India (AMFI), on October 15, denied reports that suggested that it had requested market regulator Securities and Exchange Board of India (SEBI) for the launch of a new index. In a media release, AMFI said "Referring to a speculative report in a section of the media about AMFI /AMCs proposing to SEBI to launch a new benchmark index, Association of Mutual Funds in India, (AMFI) has clarified that it has not written to SEBI proposing the launch of new index nor capping any stock in the Index." AMFI said whenever any mutual fund launches a scheme, the fund house chooses an appropriate benchmark index which reflects the composition of the scheme's portfolio. "Undoubtedly there are challenges in performance measurement as indices do not have a cap on stock whereas mutual fund schemes have a cap of 10% on a stock. However, this issue needs to be settled between fund houses and index calculating agencies," AMFI said.