New Delhi, July 18 -- India's mutual fund industry body thinks it has too much money earmarked for investor awareness-and wants Sebi to cut the flow.

The Association of Mutual Funds of India (Amfi) wants the Securities and Exchange Board of India (Sebi) to cut the mandatory levy that feeds its investor-awareness fund, three officials familiar with the matter told Mint.

Amfi believes the fund has grown too large to spend meaningfully. A lower levy could also give asset management companies (AMCs) greater flexibility over investor-awareness spending and potentially improve their profitability.

Under the Sebi (Mutual Funds) Regulations, 1996, AMCs are required to set aside 2 basis points of their daily net assets, within the overall total...