Sinha asked fund houses to check the quality and manner in which such programs are being carried out.
Concerned about the way fund houses are conducting investor awareness programs, SEBI Chairman UK Sinha asked Chief Executive Officers and Trustees of fund houses to utilize the two basis corpus efficiently and check the quality of such programs. He was speaking at the 10th CII Mutual Fund Summit held in Mumbai.
Expressing his resentment with the IAPs, Sinha said, “SEBI was expecting that IAPs will have a great impact in increasing mutual fund penetration. Hence, I request all the CEOs and trustees of mutual fund houses to check the quality and manner in which they are being conducted.”
SEBI has observed several instances where turnout was only 4 to 10. In fact, the regulator came to know that an AMC had organized an event for distributors under the garb of investor awareness program.
Earlier in 2013, SEBI had allowed the fund houses to spend 2 basis points of overall AUM to carry out investor awareness program so as to increase the penetration. Currently, the mutual fund industry has close to Rs. 200 crore to shell out under this program.
On the B-15 expansion, Sinha was happy to note that the inflows from smaller cities increased by one percent from 12.68% to 13.68%.
Meanwhile, SEBI Chairman has asked fund houses to create a brand value of mutual funds. “Fifty years have been passed since UTI came into existence, but still a lot of people don’t know about mutual funds. Also, several reports show lack of awareness of people about about mutual funds. I strongly believe that a combined effort is needed to grow the mutual fund industry. Fund houses should come up with an idea to showcase mutual fund as a long term asset class.”
