Heeding regulator SEBI’s direction, mutual fund houses have agreed to contribute 0.01 per cent of their total assets under management (AUM) to industry body AMFI for investor awareness programmes, a move that could entail contributions of over Rs 140 crore.
The fund houses, however, are yet to decide whether this contribution is to be made on a monthly basis or a quarterly one.
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 monthly board meeting scheduled later this month.
“Fund houses have already started contributing 50 per cent of the two basis points corpus meant for the IAP to AMFI from April 1. We are likely to form a committee to decide how to utilise the fund during the board meeting,” CVR Rajendran, CEO, AMFI said.
At the end of April, the total assets under management of the industry stood at Rs 14 trillion, which translates into Rs 140 crore for the IAP from 43 fund houses. SEBI has asked AMCs to invest two basis points of their AUMs on investor awareness activities and half of that should go to AMFI.
“Asset management companies have already shared 50 per cent 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 Rs 1 crore of unspent IAP corpus for the last fiscal to AMFI and we will be contributing the same amount from April 1 onwards in a similar manner. However, we are yet to decide if it has to be done on a monthly or a quarterly basis.” —PTI
AMCs to invest 2 basis points of assets on investor awareness. Half of this is for AMFI
