The mutual fund industry needs to form an ethics committee as the biggest risk to the growth in the industry is an individual misdemeanour, Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch said on Tuesday. "Today where we are as an industry, we have a very strong foundation. Now is the time to build a superstructure on top of this. I think the only thing that is a risk to the industry is individual misconduct...If we find it, unfortunately as a regulator we have to step in," Buch said at an event.

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The foundation of the MF industry is very strong and the only thing that can shake it is the individual misdemeanour, therefore, there are talks of the Association of Mutual Funds in India (AMFI) having an ethics committee, in whatever form or manner, and for that committee to take action against those doing wrongdoings in the market on a self-regulatory basis, she added.

She expressed confidence in the industry's potential to expand from its current size of Rs 40 lakh crore to around Rs 100 lakh crore. Further, Buch said, technology is an important aspect that helps the industry to function in an efficient way and be cost effective at the same time. She noted that the MF industry itself has not invested in building any core technology. "The industry itself has not invested much in building core technology. I worry for you on that count. I would urge you to invest in the systems and technology," she added.

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