The chief executive of the Association of Mutual Funds in India (AMFI), HN Sinor, in an exclusive interview with Moneylife’s Sanket Dhanorkar and Ravi Samalad. This is the second part of a two-part series
ML: There have been allegations that AMFI is controlled by big fund houses and that all big decisions are taken without the consensus of all the participants.
HNS: I also heard about that but that’s not true. Our board of directors is itself in a way represented by both small and big fund houses. The second thing is that ever since I have come in here, after every board meeting we also have a general membership meeting where CEOs of all members come. So it is not only whatever we discuss at the board that I brief them on, but we also interact on various other issues collectively. So I don’t think anybody has a complaint now that his voice is not heard. Out of 42 members now, generally 30 to 34 members are present. It’s a good number. Normally all our meetings are followed by dinner. So everybody stays back and talks to one another. Yes I heard the murmur when I walked in here, but I don’t hear it now. It’s only 40 and not a very large number. I can understand that if our membership is in hundreds then you have a problem. I have the habit of using my email very regularly. So the CEOs are in the loop all the time.
ML: AMFI had warned some national distributors which also included banks who indulged in unfair investor poaching. Now that the trail commission has been stopped for both new and old distributors, is there any reduction in AUM switch?
HNS: We have seen that between December and March there was a large amount of switches as a result of which we had to take this somewhat hard decision of not paying trail commission to either. The impact of this was that within 10 days switches came down. I have not received complaints thereafter.
ML: The National Institute of Securities Markets is now conducting the examinations for distributors. Apparently AMFI’s curriculum was not updated with the current changes in the mutual fund industry.
HNS: NISM has already revised the syllabus. I came to AMFI just four months back and by that time the decision had already been taken to shift the educational certification to NISM. So I didn’t have much to say that time. It’s a graded examination. Ultimately the distributors have to use this as an advisory more than anything else and if they have to be a financial advisor I think their knowledge level has to be much better.
ML: AMFI has recently raised the ARN renewal fees across the board. You have also raised the new ARN registration fees. This move has drawn some criticism especially from smaller IFAs.
HNS: This had not been revised for the last 10 years. Financial advice is a serious business and we would like serious players to come in. Earlier, unfortunately, we had made various concessions such as for senior citizens, assuming that it is one area for them to earn by way of commission. But today we have so many issues around mis-selling and SEBI has been rapping us on various issues. I think we have to become serious about who is distributing the products.
ML: Can you please share with us the investor education programme that you are conducting?
HNS: This year we have decided to have almost 2,000 programmes across the country largely covering the top 100 city centres. That would mean not only the capital and State capital but district-level centres also. The work is already on. In the first two months we have been able to conduct 96 programmes and these are called ‘AMFI’s investor education programme(s)’, which is not a marketing pitch by any of the fund houses but is essentially to spread education and awareness about the products.
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