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Since 1st March, 1999
 
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Mutual recovery pill

Calcutta, Jan. 10: The Association of Mutual Funds in India (Amfi) plans to propose a three-year road map to market regulator Sebi for phasing out the upfront commission paid by fund houses to distributors rather than abolish it at one go.

Amfi chief executive H.N. Sinor said, “There must be something wrong somewhere if the regulatory guidelines are not helping anyone in the industry. It, therefore, needs to revisit the changes.” He was speaking at a seminar organised by the Indian Chamber of Commerce here today.

“The market regulator has come out with 30 regulations in the last 18 months. During the same period the mutual fund industry has witnessed a degrowth (negative growth) of 25 per cent,” Sinor said, adding that the distributors are not selling mutual fund products and investors are increasingly redeeming their investments.

He said all other sectors, including financial services, banking and insurance, were growing. The negative growth in mutual funds happened at a time stock markets gained 80 per cent.

However, he said the intention of the regulatory changes was good. “The problem was with the speed at which these changes were brought about. The industry players did not get time to settle down.”

The other suggestions that Amfi wants to make to Sebi include the recovery of the transaction charge by distributors from investors and a schedule of charges for providing financial advisory services.

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