The industry is expected to give Rs. 50 crore to AMFI and SEBI to carry out investor awareness programs.
SEBI and AMFI are said to have asked for 15% and 10% of investor awareness program (IAP) corpus available with the fund houses respectively. Both the regulator and the industry body together are expected to get Rs. 50 crore to carry out such investor awareness programs.
A few days back AMFI had sent an internal circular to fund houses asking for 10% share of IAP corpus. The CEO of a large fund house confirmed receiving this mail. “We did receive a communication from AMFI asking us to shell out 10% of IAP corpus,” he said. “In fact, AMFI has already started using this corpus to carry out such programs,” said another senior official of a large fund house.
So far, SEBI has not sent any formal communication to fund houses but industry officials have confirmed that SEBI is keen to get 15% of IAP corpus. Earlier, a senior SEBI official had reportedly suggested in a discussion with AMFI that a part of the 2 basis investor awareness budget be set aside for SEBI so that SEBI could carry out its own investor education campaign.
Recently, SEBI Chairman U K Sinha has expressed his resentment with the IAPs and asked Chief Executive Officers and Trustees of fund houses to utilize the two basis corpus efficiently and check the quality of such program. 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.”
Earlier in 2013, SEBI had asked fund houses to spend 2 basis points of their AUM on investor awareness program. Currently, the mutual fund industry has close to Rs. 200 crore IAP corpus.
