The Securities and Exchange Board of India (SEBI) working group examining the roles of mutual fund distributors (MFDs) and investment advisers (IAs) is at an advanced stage of submitting its report, SEBI executive director Manoj Kumar said.
The committee is looking at how to address conflicts arising from the different roles of the two market participants and how they can coexist while serving investor interests, Kumar told Moneycontrol on the sidelines of the Global Fintech Fest in Mumbai. Kumar did not provide a specific timeline.
“The simple philosophy is that going forward if there are any overlaps or challenges because of the different role these two market participants are performing, how we can harmonise it so that both can coexist and serve the investor interest,” he said.
Moneycontrol had reported in January that SEBI had formed the working group to examine the existing regulatory framework governing MFDs, overlaps with IAs, the scope of advice and compliance requirements, besides regulatory challenges and conflicts. The group's mandate also included examining options such as limited investment adviser licensing or deemed investment adviser status for MFDs.
The two categories operate under different regulatory frameworks and business models. MFDs distribute mutual fund products and earn commissions from fund houses, while investment advisers provide advisory services for a fee. MFDs are registered with the Association of Mutual Funds in India (AMFI), while investment advisers are registered with SEBI.