Once AMCs adopt the new reporting format suggested by SEBI, the number of overall folios could shrink
Mumbai: The mutual fund industry could see a further plunge in the number of folios as AMCs start to consolidate investor folios as per the new diktat from SEBI. The regulator had issued a circular to AMCs asking them to club their folios based on asset class like equity and debt. Cafemutual had reported about SEBI’s circular.
SEBI is keen on identifying unique individual investors as currently there is lot of duplicity due to multiple folios held by each investor. Some experts say that the latest SEBI move may result in some cost reduction for the industry.
“Typically each family will have several folios, many of them in combinations and permutations such as husband-wife, father-son, singly, jointly etc. Some consolidation has already happened due to KYC. The folios will only come down,” says Srinivas Jain, SBI Mutual Fund.
“The folios will go down to some extent,” echoes a CEO of a mid-sized fund house.
“The folio data will be more accurate now. The assets under management are important rather than the number of folios. The folio numbers are important from the R&Ts perspective. If folios fall, the charges will come down to that extent. The overall cost may come down,” said a sales head of a private fund house.
The mutual fund industry has 4.72 crore folios, a majority of which are retail folios.
