The mutual fund industry is benefited as a whole if there is a compliance with all rules and regulations rather than it being a burden, said Ananta Barua, a Whole Time Member at the Securities & Exchange Board of India (SEBI) on December 14.
In his keynote address at the Moneycontrol Mutual Fund Summit, which was held today, Barua said that the mutual fund regulations are based on the principles such as disclosure or transparency, ease of investments, low cost vehicle, risk diversification, liquidity, prevention of miss-selling, avoiding conflict and aligning of incentives. He elaborated on some of the key measures SEBI has taken to make investments in mutual fund more investor friendly.
In last two years, SEBI has unveiled many regulatory changes to ensure that the mutual fund industry works better towards protection of investors’ interests. Some of the key measures include revamping risk-o-meter, introduction of potential risk class matrix, inter scheme transfers, making it mandatory for employees of asset management companies to invest part of their compensation into schemes they manage.
The regulatory changes announced by SEBI over a period of time ensure that the interests of all stakeholders are aligned, he said.
Barua also highlighted that even during trying times of lockdowns announced to contain the Covid-19 pandemic, mutual fund investments ensured that the investors are paid on time if the investors choose to redeem their investments.
He further said that the regulator has already issued guidelines for risk management in the industry. Both scheme level risk and asset management company level risk are addressed by the mutual fund regulations. Trustees are entrusted with the responsibility to protect investors’ interests, he said.As per the Association of Mutual Funds in India’s monthly data release, the assets under management for the mutual fund industry stood at Rs 40.3 trillion as on 30 November 2022. This is the first time the industry touched 40-trillion mark.
Contribution from systematic investment plans to the mutual fund inflows an important yardstick of domestic flows, which stood at Rs 13,306 crore in November 2022 compared to Rs 11,005 crore a year ago.