The regulator has asked fund houses to furnish unique retail folios according to their asset class from this month
Mumbai: Market regulator SEBI, through a two page circular issued to mutual fund houses two days back has asked them to identify unique retail folios according to their asset class like equity and debt, said one person familiar with the development.
“SEBI wants asset class specific data of retail investors. Earlier there was no clarification. It was open to multiple interpretations. It is applicable from May 2011. We have to file the data from March 2011 as per the new format. This is largely for retail investors,” said a CEO of a mid-sized fund house.
Currently an investor can possess multiple folios with a fund house. Normally, a new folio is allotted every time an investor puts money in a new scheme though the investor has the choice of consolidating his folios by submitting a request to the fund house.
SEBI has asked AMCs to segregate retail investors on asset class specific basis. For instance, if an investor is investing in an equity and debt scheme, then MFs will have to consider it as two separate folios. If he/she is investing in equity and tax saving scheme, then it will be counted as a single folio.
According to AMFI data, the mutual fund industry has a total of 4.72 crore folios as on March 2011, out of which 4.60 crore are retail folios. Retail equity folios consist of 84% or 3.86 crore of the total 4.60 crore retail folios.
Apparently, the regulator wants to identify unique retail folios in the mutual fund industry. Once the new format of folio reporting is adopted by the fund houses, the total number of retail folios can see a drop as they will now be identified based on their asset class. The industry has seen a decline of 16.48 lakh folios from the retail investor category in equity schemes in FY11.
