Heeding to the regulator Sebi's direction, the mutual fund houses have agreed to contribute 0.01 per cent of their total asset under management (AUM) to the industry body Amfi for investors awareness programmes -- a move that could entail contribution 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 on a quarterly basis.
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 forthcoming 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 slated for the later month," Amfi chief executive CVR Rajendran told PTI.
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 2 basis points of their AUMs on investor awareness activities and half of that should go to the 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 the 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 on a quarterly basis.
