Though the activities of the UTI are largely that of a mutual fund, it also to some extent acts as investment institution, as per the provisions of the UTI Act.

In case, if it's role as an investment institution is to be totally eliminated, it requires amendment to the Act.

Justifying its role as an investment organisation, for the better performance of the economy, UTI in a note to the Government has said that at present equity capital market lacks depth, while the capital raising efforts of the corporate sector requires such support for some more years, particularly as pension fund reforms are not in place.

``What is needed is more mutual funds and investment institutions of the size of UTI and not a plethora of small size funds and institutions,'' feels the UTI note.

Also in the wake of second generation reforms being undertaken in the financial sector and doing away of distinction between investment banking and commercial banking even in USA through the dropping of Glass Steagle Act, the environment is prompting DFIs to become universal banks.This in the view of UTI is a step in the right direction.

``Arising from this, it would also be useful if there is consolidation of activities relating to mutual funds promoted by FIs as the regulatory set up for MFs is different,' suggested UTI.

According to UTI, another issue on the subject which is under debate in the country is the desirability or otherwise of setting up a Super Financial Services Authority as a Super Regulator on the lines of the UK model.The credit concentration norms applicable to the DFIs are not applicable to UTI.

However as per UTI guidelines, the following guidelines are to be observed while taking investment decisions,