The focus would have to be on training the fund managers in the new products and putting in place new systems to facilitate trading in derivatives. And though, some of the private mutual funds set up in joint venture with a foreign partner may not find the going too tough as they can always fly in an expert from abroad, Indian mutual funds would need to arrange for international expertise for their fund managers before delving into these effective yet risky instruments.

Chief executive officer of GIC mutual fund, AR Prabhu feels that Indian fund managers do not have the required expertise and knack for trading in the futures market and it could turn out to be a disaster without requisite training. "We would need good hard core training, inputsand insights for our fund managers before getting into action" added Prabhu.

According to the chief executive officer of LIC mutual fund, RG Sharma, it is quite premature for the Indian mutual fund industry to get into derivatives trading. "We will have to overhaul our entire infrastructure and set up, as we will have to redesign our old systems and introduce new systems. The current systems that we have are archaic as compared to those prevalent abroad. It may not be very easy to bring a change in the systems", added Sharma.

Sharma said that although the capital inputs would not be very huge but switching from one system to another will require time and the most crucial element would be training the fund managers in the nuances of trading in futures. "They would need to keep a vigilant eye so that in their enthusiasm they do not loose the focus and go overboard in the new opportunities that would be available before them", said Sharma.

Mutual funds with foreign partners also seem to be cautious. "Wewould like to see the rate at which the market becomes familiar with the products and how they can be used. Until we are very confident that the instrument has been understood at every level in our organization we would not take the step. Also, it requires a huge cash inflow into the markets for trading in derivatives", said the managing director of ITC Threadneedle mutual fund, Richard Overton.

The Canbank MF's managing director, KV Hegde said: "We will slowly and definitely catch up with the world market but it will take some time and lot of inputs for our fund managers before we can really take off".

The Sun F&C mutual fund is also planning to take some time before embarking on this journey. "We have a team of experts at our London office so in that case we have in-house expertise. We will study the developments and then seek necessary approvals from our board and unit holders", said CEO, Sun F&C, Nikhil Khattau.