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Execution only platforms (EOPs) will foster innovation and increase competition in the distribution space, believes Ananta Barua, Whole Time Member SEBI. He was speaking at the 15th Mutual Fund Summit held today in New Delhi.
Barua said, “One significant change is the establishment of an execution only platform for direct plans, allowing fintech companies to offer access to a larger pool of investors. This move promotes competition and encourages the establishment of more mutual funds.”
Earlier, SEBI proposed introduction of EOPs which essentially means that online investment platforms like Coin by Zerodha, ET Money, Kuvera, Groww and Paytm Money will have to become an agent of investors or an agent of AMCs. While agents of investors will have to charge fees directly from investors, agents of AMCs can get commission in the form of transaction fees.
Barua also talked about MF lite regulation which will facilitate ease of doing business for emerging fund houses. He also said that SEBI has simplified requirement for becoming sponsor of a mutual fund which will enable entities like private equity funds to sponsor a mutual fund company.
The SEBI member said that transparency has always been a cornerstone of the mutual fund industry. He said, “Investors can easily access comprehensive information about the portfolio of a scheme, including its performance and holdings on the fund's website. Additionally, SEBI mandates regular disclosures of portfolio details for debt funds every 15 days. This transparency empowers investors to make informed decisions and helps ensure fair treatment.”
Further, Barua said, “SEBI is committed to promoting good governance practices in the mutual fund industry. Trustee supervision of AMCs has been strengthened and they now have additional responsibilities for overseeing fairness of fees and expenses, AMC performance, prevention of market abuse and avoidance of conflicts of interest.”
