SEBI chief U K Sinha will meet the Nandan Nilekani committee today to take stock of the progress on SEBI’s project of facilitating mutual fund transactions through ecommerce platforms.
Sinha said that he is serious about making this a reality and actively pursuing the project with the committee. “There a lot of technical issues which the Nandan Nilelkani committee is trying to fix. In fact, we are meeting the committee today. We are active and serious about it,” said Sinha.
He was speaking to the media on the sidelines of CII Corporate Governance Summit held in Mumbai today. “The main mandate that we have given to the committee is that if so many things can be bought online why can’t mutual funds be bought online, especially when it is a well-regulated industry?” said the SEBI chief.
SEBI is likely to ask e-commerce distributors either to develop their own skill sets like IFAs or work in a tie up model with IFAs (market place model).
Ananta Barua, Executive Director, SEBI had earlier said that there would be three routes through which mutual funds would be distributed on e-commerce sites – distributor route (both online and offline facility), only distribution route (online distribution) and advisor route (online).
“We want a system where even though we may allow e-commerce, there will be same requirements which we are debating should be applicable because if they sell a product then there is an executive who is an employee, he needs to be certified and he should sell those products that are suitable and all three routes - distributor route, only distribution route and ‘all through’ advisor route are being debated,” Barua added.
SEBI’s proposal to facilitate mutual fund transactions through ecommerce sites has met with mixed response. While some say that it will help expand the reach of mutual funds,others say that investors can’t take informed decisions, especially when it comes to buying mutual funds online.
“If an investor has a bad experience on e-commerce websites, chances are that she will never invest in mutual funds. Investors can’t make an informed decision, especially when it comes to buying funds, without distributor’s advice,” said a Mumbai based advisor wishing anonymity.
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