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  • MF News Mutual funds distributors outside the purview of our regulation: SEBI

    Mutual funds distributors outside the purview of our regulation: SEBI

    SEBI clarifies that MFDs are agents of mutual funds and not independent entities.
    Karishma Gagwani Sep 14, 2022

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    Madhabi Puri Buch the Chairperson of SEBI shared her views on the long pending Self-Regulatory Organization (SRO) for mutual fund distributors at the recently held Federation of Indian Chambers of Commerce and Industry (FICCI) event - 19th Annual Capital Markets Conference 2022.

    Madhabi said, “SEBI’s view is that mutual funds distributors are agents of mutual funds. They are not independent entities that SEBI needs to/should regulate.”

    Madhabi further added, “SEBI will regulate mutual funds and it is up to them to ensure good behaviour by MFDs.”

    The SEBI board had earlier approved the proposal to set up SRO to regulate MFDs and had also issued a consultation paper on the appointment of SRO. However, there haven’t been any recent developments on the subject matter.

    The SRO would have been responsible for micro-regulations of MFDs, spreading mutual fund awareness, educating and training distributors and conducting screening tests.

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    8 Comments
    Prashant Shah · 1 year ago `
    This doesn't make any sense. Constantly they have been behind distributors and now theyvare saying we are not under their purview. Something fishy is going on and we should be extremely alert and vigilant on their next move. My suggestion
    Vivek Mallik · 1 year ago `
    This shows how a single person changes the complete thinking process. IMHO, all such regulators should always have a board and decision must be by majority.
    Amit · 1 year ago `
    SEBI is hell bent to push direct selling platforms because they are turning into large corporates, there's no regulation of promotions done for specific schemes on these platforms. But they were so concerned when the MFD had upfront commission and even put cap on expense ratio.
    Rajesh GUPTA · 1 year ago `
    Very soon they are going to eat what they said. SEBI will say," You did wrong interpretation of what she said"
    Rajesh GUPTA · 1 year ago `
    Very soon they are going to eat what they said. SEBI will say," You did wrong interpretation of what she said"
    Anurag Sahu · 1 year ago `
    Does not matches with sebi autocratic way of working.
    DEBRAJ SENGUPTA · 1 year ago `
    This view is contrary to what SEBI has been doing for long. If MFDs are mere agents of MFs like Insurance Industry then any kind of misinformation or misrepresentation of facts by a section of them mainly large distribution outfits, then complaints would go unheard of. MFs to an extent may not take coercive action against erring distributors for violating norms or may take token steps like rebuking and let go. Best could have been a body where AMFI represents 50% and all other recognised Distribution Associations have 50% representation. This would augur well for an important part of growth for the Industry as a whole
    Vishal Rastogi · 1 year ago `
    If its true to her words than plz. relief the regulation on Distributors commission first to AMC this will increase the growth of MF industry by 3x faster than today.
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