SEBI met MF CEOs last week to discuss investor complaints. AMFI has set up a committee to look into the issue
Mumbai: SEBI has taken serious note of the large number of complaints by investors against mutual fund houses. Last week, SEBI officials met chief executives of several mutual funds to discuss the issue, according to a report in the Economic Times newspaper.
The report, quoting two unnamed industry officials, said SEBI wanted the fund houses to list the measures they were taking to resolve investor grievances.
SEBI was particularly piqued at a few fund houses that have long lists of pending complaints. It is particularly worried about systemic issues like discrepancies in account statements and delay in mailing unit certificates, the report said.
According to AMFI records, there were a total of 4.5 lakh complaints by investors against 39 mutual fund houses. UTI Mutual Fund, which has over one crore folios, tops the list with 99,347 complaints, about 22 per cent of the total. The largest number of complaints (30,900) was for non-receipt of dividend from UTI Mutual Fund and another 16,700 for non-receipt of statements of accounts.
Birla Sun Life Mutual Fund, which has more than 24.66 lakh investor folios, had over 95,000 complaints during 2009 and 2010. There were a total of 57,600 investor complaints against ICICI Mutual Fund, the third largest fund house.
The largest fund house, Reliance Mutual Fund, had lesser number of complaints at 10,200. Of the 7,600 complaints lodged against HDFC Mutual Fund, over 5,600 pertain to discrepancies in statements of accounts.
“A good number of these complaints are insignificant in nature,” the report quoted the CEO of a private fund house as saying. “There is no uniformity in the way these complaints are filed. Investors blame us for not getting redemption proceeds or dividend payouts. The reason for this could be change of address by the investor, which was not reported to the fund house. Incorrect address and faulty pin codes result in statements getting lost in transit.”
Non-receipt of dividend and redemption proceeds also anger investors. Most fund houses send dividend cheques through ordinary post. High-value dividends cheques and redemption proceeds, however, are despatched as registered post. Discrepancies in accounts have more to do with factual errors in account statements. “It is negligence on the part of investors that is resulting in such complaints. Many a time, distributors fill up the application form on behalf of investors. They tend to give wrong names, incomplete addresses and other details,” said the marketing head of a bank-promoted fund house.
Other complaints like overcharging, deviation from fund attributes or illegal fund switches are less.
AMFI has set up a committee headed by its Chief Executive, H N Sinor, to address the problem. The committee is expected to categorise complaints under different heads and also introduce a system for quick redressal of complaints, the report said quoting unidentified sources.
