Sebi chairman Tuhin Kanta Pandey on Friday cautioned the mutual fund industry that beyond market-linked investment risks, operational risks such as fraudulent redemptions by impersonators pose a growing threat to investor confidence.
He stressed the need for heightened vigilance, urging asset management companies (AMCs) to respond swiftly and track evolving fraud patterns as perpetrators become more sophisticated.
While there is a need to diversify beyond the blue chips, he noted, mutual funds as a retail product should exercise caution while investing in micro-cap or debt papers in bespoke deals.
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