Mutual funds are the other major financial intermediary collecting funds mainly from small investors and investing them in financial market securities. Till 1986, the entire mutual funds activities were vested in the Unit Trust of India (UTI). In 1987, a few public sector banks, Life Insurance Corporation of India and General Insurance Corporation, entered the mutual funds business. Again, it was in 1993 that private sector companies were allowed to operate in this area. Thus, in view of growing mutual funds activities, regulation became imperative and it was Securities and Exchange Board of India (SEBI) that began regulating them. It is not simply the regulation, several policy measures were taken to reform the functioning of this particular intermediary. The present chapter highlights ...