MFD Universe, one of India’s largest Telegram groups of mutual fund distributors has handed over a letter to G Mahalingam, Whole Time Member, SEBI requesting to consider their suggestions for the growth of the MF industry.
Among other requests, the group has urged SEBI to introduce a qualifying examination for investors who wish to invest in mutual funds through direct plans. The group believes that such an examination would help ascertain whether the investors are capable of taking informed decisions independently.
The group further claimed that in developed economies like Singapore, investors are required to clear a qualifying examination to invest in financial products.
Other key suggestions of the group are:
- Adequate representation of small, medium and large distributors in the proposed SRO of mutual fund distributors
- Segregate accounts of direct plan and regular plan
- Uniform trail commission across old and new assets to reduce churning
- Upfront commission for new individual distributors
- Retirement benefits from AMCs to distributors
- Proportionate sharing of TER cut among AMCs and distributors
- Fund managers, CEO and top management of AMCs should be held accountable for default in invested companies
- Bank KYC should suffice for investment in mutual funds
- Uniform process for transferring assets in case of death of investors
- Restrict ex-AMC officials and their family members to practice MF distribution business for at least 2 years
- Restrict RTAs from MF distribution business as they manage client data
- GST should be levied over and above TER
Currently, MFD Universe has over 4200 IFAs as members.
