The Securities and Exchange Board of India (SEBI) has asked the four registrars and transfer agents (RTAs) -- CAMS, Karvy, Franklin Templeton and Deutsche Investor Services -- to club investor data together and provide a consolidated statement of account for all investments in mutual funds.
In a meeting with independent financial advisors (IFAs), K N Vaidhyanathan, executive director, Sebi, said on Wednesday that Sebi has been trying to make the four RTAs to try and come out with a consolidated account statement for all mutual fund investments instead of different statement for different schemes.
Allaying the fears of IFAs and mutual fund distributors, the Sebi executive director said that trail commission on mutual fund investments would stay. However, he declined the possibility of reinstating entry load. The regulator banned entry load in mutual funds from August 1, 2009.
Vaidhyanathan also emphasised on an active role of trustees in monitoring fund management by asset management companies. “Trustees must see how equity/debt schemes of the same AMC show such large difference in returns given over a period of time,” he said citing example of a fund house, which has 17 equity diversified funds with the best giving a one-year return of 140 per cent and the worst 20 per cent.
Among other important steps to be taken in the future, Vaidhyanathan said that there would be a uniform expense ratio in all schemes for all category of investors and uniform forms and procedures for all AMCs to follow in all type of transactions. He said that holding mutual fund account statement in demat form would not be mandatory.
On independent financial advisors, Vaidyanathan said IFAs have a role to play in taking mutual funds to untapped markets and hence bringing more investors in mutual funds’ fold. “IFAs should change their business model to increase the number of investors by leveraging on technology. If required they should adopt the sub-broker model,” he said.
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