BackMutual Funds to pay 0.01% of AUM to Amfi for investor awareness drive
The fund houses, however, are yet to decide whether this contribution is to be made on a monthly basis or on a quarterly basis
Premium
Mumbai: Heeding to the regulator Securities and Exchange Board of India’s (Sebi) direction, the mutual fund houses have agreed to contribute 0.01% of their total asset under management (AUM) to the industry body Association of Mutual Funds in India (Amfi) for investors awareness programmes—a move that could entail contribution of over ₹ 140 crore.
The fund houses, however, are yet to decide whether this contribution is to be made on a monthly basis or on a quarterly basis.
Moreover, Amfi is likely to form a committee to decide how to utilise the fund and the issue may come up for discussions during the forthcoming monthly board meeting scheduled later this month.
“Fund houses have already started contributing 50% of the two basis points corpus meant for the Integrated Action Plan (IAP) to Amfi from 1 April. We are likely to form a committee to decide how to utilise the fund during the board meeting slated for the later month," says Amfi chief executive CVR Rajendran.
At the end of April, the total assets under management of the industry stood at ₹ 14 trillion, which translates into ₹ 140 crore for the IAP from 43 fund houses.
Sebi has asked asset management companies (AMCs) to invest 2 basis points of their AUMs on investor awareness activities and half of that should go to the Amfi.
“Asset management companies have already shared 50% of their unutilised IAP corpus accrued until March 2016 to Amfi, though this is a very small amount," Rajendran said.
He further said the issue was already discussed at the last board meeting in which it was felt that the Amfi panel on financial literacy will not be able to manage such a huge fund and hence the need to form another committee to decide on fund utilisation.
Taurus Mutual Fund’s chief executive Waqar Naqvi said his company has “already contributed ₹ 1 crore of unspent IAP corpus for the last fiscal to the Amfi and we will be contributing the same amount from 1 April onwards in a similar manner. However, we are yet to decide if it has to be done on a monthly or on a quarterly basis."
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
