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The Centre may lend an ear to the mutual fund distributors, who are crying foul over a recent SEBI directive requiring disclosure of commission paid by mutual fund houses to the distributors.
SEBI norm irksWhat is irking investment advisors is the SEBI directive, contained in a March circular, requiring AMCs to disclose the commission in the account statement sent to investors once every six months. The SEBI circular mandates this disclosure from October 1 this year.
Reacting to tweets from investment advisors seeking Centre’s intervention, Jayant Sinha, Minister of State for Finance, said in a tweet that “we are in discussions with all stakeholders on this matter.”
Sinha also tweeted that he would be happy to meet industry delegation on this matter.
Ensure distributors’ welfareElaborating the concerns of distributors, Suresh Parthasarathy, President, Independent Financial Professionals Association, Chennai, told BusinessLine that SEBI should ensure transparency without disturbing the livelihood of “so many distributors.”
Already, only 20,000 of the 1.2 lakh registered investment advisors are active, he noted, adding SEBI needs to bring a discussion paper detailing a 5-10 year roadmap for this profession.
A North India based investment advisor queried as to why the incomes of advisors be made known to the investors. This could lead to unwarranted practices such as investors seeking return of a portion of the incomes earned by distributors or even directly going to buy mutual funds.
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