The due diligence will cover areas such as distributors servicing standards, grievance redressal mechanism, experience, staff training and certification among other things.
A majority of the AMCs have agreed with AMFI for appointing common audit firms to kick start distributor due diligence, according to sources close to the development. Meanwhile, AMFI is trying to convince the three remaining AMCs to come on board as well. The cost for the project will be shared among all the AMCs depending on the number of distributors empanelled with a fund house.
SEBI’s circular states that the audit should ascertain distributors servicing standards, grievance redressal mechanism, experience, staff training and certification among other things.
The due diligence, a part of SEBI’s first step towards regulating mutual fund distributors will cover the big distributors accounting for a substantial chunk of the industry AUM.
Cafemutual had earlier reported that 11 firms are in the race to get the mandate for due diligence from AMFI. Read here.
Also read: No. of distributors qualifying for due diligence comes down.
