In a letter sent to fund houses, AMFI has tweaked its best practices guidelines on direct plan feed. It has now clarified that AMCs can provide feeds of direct plans only to SEBI Registered Investment Advisers (RIAs) and not MF distributors. Cafemutual has a copy of this letter.
Last month, AMFI had sent a letter to fund houses communicating SEBI’s approval on providing feeds of direct plans to both distributors and RIAs.
In the letter, AMFI has said, “On a review, the AMFI Board felt that the data feed should be provided only to SEBI RIAs who help the investors under direct plan to track their portfolios and not to MF distributors. We have informed SEBI about the above decision and they have agreed to modify their permission accordingly. It is clarified that fund houses may share the data feed of investors under direct plan only with SEBI RIAs11. ”
Fund houses will have to take prior approval of investors before sharing it with the RIAs. Investors will be required to give their consent in a standard format which is being worked out by AMFI. Also, SEBI has asked fund houses to iss1ue a periodic declaration authorized by the trustees of AMCs that no consideration or brokerage is being paid to RIAs for such a service. Earlier, AMFI had requested SEBI to allow fund houses to provide direct plan feeds to the distributors and RIAs.
Currently, there are just over 357 RIAs in India of which 188 are individuals.
