Common platform for mutual funds to help investors in service-related transactions
SECTIONS
Last Updated: Jul 28, 2021, 09:47 AM IST
Share
Agencies
Markets regulator Sebi s decision on a common platform for mutual funds will be a big step in the direction of improvement in investor services, industry insiders said on Tuesday. The platform will permit investors to place both transaction as well as service requests.
The regulator, in a circular, on Monday asked registrars and transfer agents (RTAs) to develop a common industry-wide platform for purchase and sale of mutual funds and to handle service requests. The platform will be jointly built by RTAs.
Read more about SIP discontinuation drops in May as equity markets hit new record highs on Business Standard. In the last few months SIPs discontinuation were in the range between 700,000 and 800,000.
Sebi s new compensation rule to create arbitrage in favour of index funds, ETFs indiatimes.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from indiatimes.com Daily Mail and Mail on Sunday newspapers.
A section of mutual fund houses feared that markets regulator Sebi s new framework on compensation will adversely affect their key employee cash flow and make it difficult to retain talent. In addition, the new rule will create regulatory arbitrage in favour of index funds and exchange-traded funds (ETFs) and will result in potential death of active fund management, fund houses said. On Wednesday, Sebi asked asset management companies (AMCs) to pay at least 20 per cent of gross salary of key employees in the form of the units of the scheme managed by them. The new rule covers all key employees who have been defined as heads of various functions and all employees who are involved in the fund management process fund managers, research teams, and dealers, among others.
The assets under management (AUM) for domestic mutual funds (MFs) have grown at a good clip, but the industry has failed to make significant inroads in the hinterlands. At the end of March 2021, the AUM from T30 (top 30) cities stood at Rs 26.07 trillion, while that from the so-called B30 (beyond 30) cities stood at just Rs 5.36 trillion. The share of B30 cities has remained in the range of 15-17 per cent of the AUM since FY19. Industry players say improving the penetration beyond the top centres will require setting up more branch networks and empanelment of distributors. Further, the industry will have to focus on investors’ education and the creation of more infrastructure. Market participants say barring a few top players, the industry may not be able to afford this.