SEBI seems to have put e-commerce distribution of mutual funds on the back burner. SEBI Chief, Ajay Tyagi said that they are not thinking about bringing in e-commerce distribution in mutual funds currently. He spoke to Cafemutual on the sidelines of an event on ‘Women on Corporate Boards in Indian Context’ organised by Institutional Investor Advisory Services (IIAS) in collaboration with PRIME Database Group, FICCI and National Stock Exchange.
Two years back, SEBI had constituted a committee headed by Nandan Nilekani to recommend measures to reduce cost structure of mutual funds. The committee had recommended SEBI to introduce a new distribution channel through e-commerce websites like FlipKart, Amazon and Snapdeal.
A former SEBI whole time director who was actively involved in the proposal to allow e-commerce distribution in mutual funds told Cafemutual that e-commerce distribution will disrupt the industry. “E-commerce distribution is bound to happen and definitely there would be some losers and some gainers. In my view, this distribution channel would increase the penetration of mutual funds.”
Brushing aside the possibility of creating a third NAV of e-commerce distribution, he said it would confuse investors.
The 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.
