The Securities and Exchange Board of India's stance on duplicating existing schemes has forced mutual funds to go slow on new fund offerings in a bullish stock market.

Sebi has asked funds to get a certificate from the fund trustees saying the scheme has complied with all Sebi provisions.

NFOs by mutual funds had come down since July this year after Sebi came down on funds launching schemes resembling those already launched by the same AMC.

"Sebi has sought details from mutual funds to see if there's any overlap from the existing funds.... it and wants trustees to be more accountable. It doesn't want old wine in a new bottle," said a mutual fund CEO. In September, as many as 30 schemes have lined up with Sebi for clearance.

Indicating the current scenario, mutual funds had launched only seven new equity diversified funds since June this year. However, they had come out with 35 equity schemes between September 2005 and June 2006.

With the Sensex scaling peaks on a daily basis, mutual funds are keen to float new schemes and mop up money from the public quickly. "We welcome the Sebi guidelines. It will make the sector more efficient. MFs need to come out with new ideas and products," said an industry source.

On the other hand, the Association of Mutual Funds in India is unfazed. "I have not come across any complaint from funds on the delay. I don't think the situation is alarming," said AMFI chairman AP Kurien.