SEBI has asked AMFI to advise all AMCs to introduce a facility on their website allowing investors to stop SIPs.
In a communication sent to AMCs, AMFI said that while it is understood that many AMCs have already enabled this facility on their website, those AMCs who have not provided the facility are requested to enable such a facility on priority.
In case fund houses cannot introduce such a facility due to limited staff and IT support, AMFI has advised them to provide an alternative option such as email to stop SIPs.
Mumbai individual MFD Paresh Shah told Cafemutual that most of his clients have raised queries on discontinuing SIPs. “We have been getting investors queries on pausing their SIPs. However, these investors are willing to restart their SIPs post three months. While most fund houses offer ‘stop’ facility on their website, they do not offer ‘pause’ facility which can facilitate temporary discontinuation. In absence of such a facility, investors will have to go through the cumbersome process to start their SIPs again.”
Another Mumbai distributor Ritesh Sheth of Tejas Consultancy seconds Paresh’s view and said that many of his clients have already stopped their SIPs. “While many investors have stopped their SIPs due to inadequate funds, another reason for this discontinuation is the lackluster performance of equity funds. Most equity funds have underperformed their benchmark in recent times. Many investors are not happy with this and are unlikely to continue their investments in mutual funds even after three months.”
As on February 2020, the MF industry has over 3 crore SIPs account with monthly SIP inflows of Rs.8513 crore. The total SIP AUM stood at Rs 3.11 lakh crore as on February i.e. 11.4% of the total MF industry’s AUM of Rs.28 lakh crore.
