The mutual fund industry and SEBI need to relook at the organisational structure of mutual funds and entrust greater responsibility on AMCs, Usha Thorat, chairperson of SEBI's MF Advisory Committee said on Tuesday.
Speaking at the Business Standard BFSI Insight Summit, Thorat said that the present MF structure comprising trustees, sponsors and AMCs has served well till date but now there is a need to relook at the roles and responsibilities of each entity and the structure itself.
"As AMCs have matured, they have become the biggest players in the organisational structure. The sponsors are no longer that active. There is no reason why AMCs can't be entrusted with the responsibility of protecting investor interest, which is now in the hands of trustees," she said, adding that running a business and looking after investor interest are not contradictory roles.
'Need to raise awareness'
Reflecting on her own mutual fund experience, Thorat said that the industry is not doing enough to keep the investors informed. "A number of initiatives have been taken in recent times but are the investors aware of them? I think there's a lot to be done by AMFI to keep investors aware of regulatory changes. Issuing circular is one thing, seeing that these get implemented and complied to is really very important," the chief of MF advisory committee stated.
Thorat also raised the issue of non-uniformity in regulations for mutual funds and insurance schemes like ULIP. "This issue has been there for long. Unlike mutual funds, these insurance schemes still offer high upfront commission. There is a need to bring uniformity in mutual fund and insurance scheme regulations," she said.
Concluding her address, Thorat delved into the issue of data privacy and cybersecurity with regards to the mutual fund industry. She said a lot of personal data is held by AMCs and that in the age of digitisation, it's important to take the issue seriously.
