MFs are still discussing legal & cost aspects of issuing a common statement of investments across fund houses
Mumbai: Mutual funds have decided to defer the facility of providing a common weekly account statement to investors to February 2011. The plan was to start this service by the first week of January 2011 but AMCs are yet to arrive at a consensus on a number of issues.
“There are some legal and cost issues which need to be sorted out. We have to decide whether we should give an option to investors,” said the marketing head of a leading fund house.
A majority of the fund houses have given their go ahead to start issuing a common account statement to investors, though some issues remained unresolved.
“People are claiming that there is a heavy cost reduction but we need to see whether we are actually saving some money. Also, client privacy is a major issue and has not been addressed yet. We have raised this issue,” said a senior official with a mutual fund.
AMFI sources confirmed that the shift towards a system of issuing a common account statement to mutual fund investors would now happen next month.
Cafemutual had on December 3, 2010 reported that registrar and transfer agents (RTA) were conducting a survey to gauge investor preference, the results of which were shared with all stakeholders.
SEBI is very keen on introducing a common statement system. However, some industry players say no sector in the world issues a consolidated account statement to investors. Further, MFs are raising questions about privacy issues. They also fear that investor details will be exposed to their rival fund houses.
Cost is another cause of concern for fund houses as they will have to issue a single account statement across all mutual funds for each transaction. There is a consensus among the industry to send out a weekly statement instead of a daily transactional-based statement to pare down some costs.
The plan drawn up for a common account statement entails effective coordination between RTAs to provide common account statement facility to investors. The RTAs will take turns for printing and dispatching common account statements.
A common account statement would be of great convenience to mutual fund distributors, apart from the investors themselves. The distributors will get to know of all the investments by their clients on a single sheet. It would also reduce the burden on them for maintaining an account for each investor.
