Fund houses will have to disclose gross inflow from each distributor
SEBI in its August 16 release has said that fund houses will have to disclose distributor wise gross inflows. Some AMC officials feel say that disclosing such data could help curb churning, others have expressed their reservations on its utility.
“It is aimed at identifying churn. But that’s not the correct way to look at it. A distributor could bring Rs 10 crore in a month but his past investments could get redeemed. You can’t call that churning,” says an operations head of a private sector fund house.
While the move is seen as bringing more transparency on the business done by distributors for AMCs, fund officials say disclosing such data would not be of any help.
“I don’t know why one should disclose such data and how would it help anybody? If we show net inflow along with gross inflow then one could ascertain whether the distributor is churning,” asks a CEO of a mid-sized fund house.
The sales head of a mid-sized AMC sums it up well for a large section of industry officials, “This is one more level of transparency. Beyond that it won’t be of any help. This market intelligence data is already available in the industry. I don’t think it would be of any benefit."
