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2023 was quite an eventful one for the Rs.49 lakh crore MF industry
While the industry reached many new milestones in terms of net equity inflows, gross SIP inflows and AUM, there were many developments and announcements that can significantly change the MF industry in the future. Let us look at a few notable highlights from the year gone by.
Faster redemption settlement
SEBI reduced settlement cycle from T+3 to T+2 in mutual funds. This happened after settlement cycle of equity markets was reduced to T+1.
Introduction of Passive ELSS
SEBI allowed fund houses to launch passive ELSS provided they stop taking fresh inflows in existing actively managed ELSS.
New players in the MF Industry
Three new fund houses – Bajaj Finserv MF, Helios MF and Zerodha MF launched their MF businesses in 2023. While Bajaj Finserv and Helios MF are into full fledge MF business, Zerodha MF focuses only on passives.
Notably, the MF industry will see a few more players this year including Old Bridge Capital Management and Unifi Capital.
Also, Jio Financial Services (JFS) joined hands with BlackRock to launch mutual fund business in India.
New categories of ESG funds
SEBI introduced five new fund categories under ESG theme. The five new ESG sub categories are exclusions, integration, best-in-class & positive screening, impact investing and sustainable objectives.
More focus on investors protection
SEBI constituted a ‘Unit Holder Protection Committee’ (UHPC). The committee has an independent review mechanism that will look at decision of AMCs from unitholders’ interests.
Also, the committee protects interest of mutual fund investors, redresses their grievances and spreads awareness and education.
No business with finfluencers
Acting tough against finfluencers, SEBI proposed that the market intermediaries which include mutual fund companies and registered investment advisors cannot engage with finfluencers directly or indirectly. Further, SEBI clarified that AMCs, PMS or AIF cannot pay any money to finfluencers.
Amfi gets new chairman and CEO
AMFI members elected Navneet Munot of HDFC MF as the new Chairman and Anthony Heredia of Mahindra Manulife MF as the new Vice Chairman.
Also, AMFI appointed Venkat Nageswar Chalasani as the new CEO of AMFI. Chalasani will succeed NS Venkatesh who served AMFI for 6 years.
Revocation of TER regulation
Giving relief to the MF industry, SEBI Chairperson Madhabi Puri Buch confirmed that the market regulator will bring a fresh consultation paper on rationalisation of TER.
Madhabi said that the MF industry has demonstrated that economy of scale has been achieved over the last five years. Further, there was a lot of granular data that has come to the market regulator and SEBI has been modifying the existing proposals based on these data points.
