Sebi chairman DR Mehta at a seminar organised by the Ficci and the UTI Institute of Capital Markets on `Mutual Funds on the Move' said:``The committee will provide Sebi with new ideas and Sebi can test its own ideas with this committee''.

Mehta said that the PK Kaul committee report giving powers to the trustees should get approval in the next board meeting of Sebi and this will go a long way in ensuring compliance among mutual funds. ``As a result of auditors, compliance reports, empowerment of trustees and regulations the mutual funds will be able to garner more money''.

Mehta said that mutual funds have also been allowed to carry stock lendingactivities which has not picked up much so far. ``The stock lending activity will pick up further with the introduction of rolling settlement. With this, mutual funds can also have derivatives trading to cater to their hedging needs'', said Mehta. He said that the bill on derivatives trading should be passed in the next session of the parliament.

Mehta said that Sebi had taken up the issue of mutual funds to be allowed to invest in securities abroad both with the government and the RBI. ``The mutual funds should at least be allowed to invest in the ADRs and GDRs, so that they can have a level playing field with the FIIs. This will also allow mutual funds to take advantage of the arbitrage opportunity'', added Mehta.

Mehta said that corporate governance was highest on the agenda of Sebi for the current year and the recommendations of the committee should be coming in by next month.``We could possibly see audit committees for companies being set up or consolidation of accounts being mademandatory''.

Special auditors proposed

Sebi proposes to appoint specialised auditors for auditing the reports of mutual funds, said the executive director, Sebi, Ashok Kacker.

Addressing the Ficci-UTI Capital Markets Seminar on mutual funds here today Kacker said:``An investor has the right to get any information that he desires from trustees, as such information as may be available with trustees of mutual funds''. He said that the agenda for Sebi included mutual funds to adopt online investor servicing. ``This will include timely dissemination of information relating to NAV, portfolio, change in key personnel and fund managers perception of market trends. Investors would also be encouraged to trade in mutual funds units on-line'', said Kacker. He added that the regulator will also like mutual funds to use the internet for information dissemination to the investors.