If AMFI turns into a SRO, it should have fair representation from all stakeholders in the industry
“The main issue of AMFI turning into SRO is its nature of participation. Currently, it only represents AMC bodies. If a SRO is formed, it should have participation from distribution community. And the members should be elected, not selected,” feels Jayant Vidwans, President, Society of Financial Planners.
SRO is a self policing body so its constituents and board need to be more representative. According to IFAs, the SRO should consist of participation from various segments - distributors, AMCs and RTAs so that the organization takes care of all the issues.
“Self regulation is the best way of regulating. But SRO depends on the structure - who the participants are and what is the objective. The objective should be to penalize the crooks and not to penalize everyone for a single person’s mistake,” said Amar Pandit, proprietor, My Financial Advisor.
IFAs favour broadening the role of AMFI to include self-regulation. “SRO is definitely a welcome regulation. If SRO functions properly, then unwanted stringent regulation will not come in future. AMFI can form the SRO with the distribution community,” said Suresh Sadagopan, founder Ladder7 Financial Services.
A few feel that AMFI SRO should not allow distributors to be a part of it. “AMFI stands for Association of Mutual Funds therefore I feel there should not be participation from other segments if it turns into an SRO. Advisors/ distributors who are only selling mutual funds can be a part of AMFI SRO but those who sell other products can’t be a part of AMFI SRO. I feel IFAs and distributors should form their separate SRO because most of them sell a basket of financial products,” said Sumeet Vaid, founder, Freedom Wealth Solutions.
