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| Amfi's new CEO looks to stop misselling, moots ombudsman |
| BS Reporter / Mumbai Mar 09, 2010, 00:30 IST |
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The Association of Mutual Funds of India’s (Amfi’s) new Chief Executive Officer H N Sinor has set a work agenda to stop missselling of mutual funds products to retail investors and also have an ombudsman for investor grievances. The new CEO also plans to revamp the code of conduct for the industry, which has not changed since the launch of the apex body.
“There is rampant misselling and small investors are very unhappy. Often investors have no understanding of the products they purchase. One has to address this area on a priority basis,” Sinor told Business Standard.
He said a distributor should be suspended from selling mutual fund products in case of misselling. The plan is not to enforce a life-long ban, but a short-term suspension. “There has to be some kind of fear among distributors,” Sinor said. So far, Amfi has take action against just six distributors since its foundation.
Sinor, former CEO of the Indian Bank Association, plans to have quick redressal of investor’s complaint —for which he is planning to put in place an ombudsman. The objective is to have a quick redressal at the ground level.
In order to improve the services provided to investors, Amfi plans to expand the list of services providers, such as Karvy and CAMS, by allowing more players in the business of servicing. In order to bring more transparency in the Rs 7-lakh crore industry, Sinor plans to revamp Amfi’s code of conduct. He said there had been no revamp in the code for the last 15 years.
However, Sinor was not surprised with 20-25 per cent of the industry funds being mobilised through retail investors. He said this was in line with the banking industry, where the current and saving accounts (Casa) contribute around 25 per cent to the banking industry deposits. “It (retail money in mutual fund) is in tandem with the banking industry,” Sinor pointed.
Commenting on the increase in the number of players in the mutual fund industry, he said that there was enough space for all the players. “There is food for everybody,” he said.
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