India will soon allow e-commerce platforms to sell mutual fund products
Markets regulator SEBI will soon issue norms allowing e-commerce platforms to sell mutual fund products, among other measures, to boost the MF industry. The Securities and Exchange Board of India (SEBI) is also planning to implement know-your-client (KYC) procedure online, to simplify the process for mutual fund investors and attract wider number of customers.
Noting increase in use of e-commerce platform and low penetration of mutual fund products in the country, SEBI chairman U K Sinha said the regulator has "set up a committee under Nandan Nilekani which has had three rounds of meeting already", to suggest ways for boosting MF industry. "Hopefully in next couple of months we will be coming out with a new set of regulations of distribution of product," Sinha said, adding that the aim was to make transactions in mutual funds "easy and convenient".
The new set of norms for mutual fund distribution are being worked on and "we will be able to bring about an entirely new paradigm in distribution of mutual fund products", he said. Sinha was speaking at the Indian capital market conference organised by industry body Ficci. Noting that RBI had facilities to make online payments, while Aadhar also has electronic KYC process, Sinha said SEBI "is also we are looking at our KYC norms how to make it simple and make it online".
"We are looking to ensure that there is no need for in- person verification, no need to vet signature. Everything should be able to be done online," he said on the sidelines of the conference. The mutual fund industry has been growing considerably over the last few years and has assets under management worth over Rs 13 lakh crore. It has been felt however that a huge growth opportunity remains untapped especially among the retail investors.
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