New Delhi: To re-energise the mutual fund industry, regulator Securities and Exchange Board of India (SEBI) plans to set up an expert panel to suggest measures for increasing distribution of MF products through digital modes such as internet and mobiles.
The panel, a sub-committee of SEBI's Advisory Committee on Mutual Funds, will look into various options and steps required to boost the penetration of mutual fund products through use of digital channels for their sale, sources said.
The sub-committee, to be headed by M N Gopinath, will submit a report to the SEBI Advisory Committee, which comprises of representatives of the industry and independent experts. This Committee will look into these suggestions, before forwarding the same to the capital markets regulator.
Gopinath, a member of the SEBI Advisory Committee, is Chairman of the Board of Trustees at ICICI Prudential MF.
The new panel is also likely to suggest steps to enhance the online investment facility and tap the internet savvy users, especially the youth, to invest in mutual funds.
It will also suggest ways to tap burgeoning mobile-only internet users for direct distribution of MF products.
According to an estimate, number of internet-enabled mobile phones in the country is expected to increase from 10-15 millions in 2010 to 300-400 millions in 2015.
The SEBI is of the view that a greater use of internet as a distribution channel can help increase the penetration of mutual funds, especially among young investors.
As per the regulator, the online phenomenon is growing rapidly as more and more people, especially the younger generation, prefer to carry out most of transactions online such as internet banking, shopping and ticketing.
At present, many fund houses are offering facility for online investment, but industry insiders say that there is a need to promote and make it more user friendly for investors by improving the infrastructure and efficiencies.
Nearly 45 fund houses together manage assets worth around Rs 11 lakh crore in India, but fund mobilisation has been a tough task for them in the past few years. One of the biggest reasons behind this low fund mobilisation is the lack of healthy participation from a large part of the country.
A SEBI-conducted study had said that mutual fund presence in the country is heavily skewed in favour of the top 60 districts of India.
Out of 60 districts, a lion's share of the mutual fund presence originates from Mumbai as the city houses the headquarters of most of the large companies, thereby getting a bulk of investments through the non-retail or institutional routes.
