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Sebi tells funds to disclose all complaints

Sebi tells funds to disclose all complaints
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First Published: Sun, May 16 2010. 10 36 PM IST

Updated: Sun, May 16 2010. 10 36 PM IST
It’s good to check your mutual fund’s past performance and its pedigree before you invest in it. However, if your fund has a rocking performance, but a lousy track record of investor servicing, you lose faith in your fund house. Till now, apart from your own experience of how swiftly or otherwise your fund house resolves your complaints, if any, there was no way to check before investing in it how good or bad your fund house is in terms of investor servicing.
Not anymore. In a circular issued to mutual funds on 13 May, the Securities and Exchange Board of India (Sebi) has made it mandatory for all fund houses to disclose the complaints they received in a given fiscal year.
Items of disclosure
It’s not just the number of complaints that the fund houses have to give. They are also mandated to disclose the nature of complaints, such as delay or non-receipt of dividends or redemption proceeds, account statements, annual reports. They will also have to disclose service-related complaints, such as a wrong or unauthorized switch between two schemes and so on.
If you track the fund’s portfolio closely and feel at any time that it has deviated from its objective, you have the option to lodge a complaint with the fund house and it will have to disclose this mistake along with other mistakes it may have committed, such as spelling out your name incorrectly or mentioning wrong permanent account number.
Your mutual fund will also have to disclose whether or not these complaints were resolved and if so, how soon. Your fund house will need to disclose these details within two months of the close of fiscal year on its own website and on that of the Association of Mutual Funds of India, the industry’s trade body, along with their annual reports.
However, for the fiscal year that just went by (2009-10), we are already almost past the deadline by almost two months. Sebi has given time till 30 June for funds to publish these details for the year 2009-10.
kayezad.a@livemint.com
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First Published: Sun, May 16 2010. 10 36 PM IST