Thursday, February 25, 2010

Is SEBI taking over AMFI???

Finally, SEBI has a full time CEO. Media reports suggest that he was ‘guided’ there by the regulator rather than chosen.We did not have the grand old man, Mr. Kurien introducing him to the media. In his first interview, he has already sounded out his intent to convert AMFI in to an SRO.If a person with no experience can make this statement on day zero, obviously he has been planted or imposed in his chair. Someone who is totally to the industry has made this remark. If AMFI becomes a SRO, it would be tragic. UK is a class example. It is akin to setting a cat to guard the milk.
Why is AMFI having a CEO, who is sixty plus, with zero experience in the mutual fund industry? Who chose him? Was it AMFI members or SEBI used arm twisting?
If AMFI moves to self regulation, it will become a law unto itself, like IRDA. AMFI will become a parking slot for retired bankers and civil servants. AMFI is just a club cum trade lobby, with vested interests guiding each and every move. SEBI, in the first place should never have given any freedom to AMFI to write any rule books.
AMFI is also a distributors club. Imagine, this is the only industry where the seller has to have a license. The fund manager can be a autorickshaw driver. AMFI / SEBI have done nothing to take care of this.

An afterthought: Maybe SEBI interfering in AMFI is a good thing. Hopefully, AMFI will now be aware of the existence of the universe called 'investors' and a watchdog will be in place. If it has to be a SRO, at least half of AMFI Board should be of people outside the industry, who can shake a leg for the investors

What a shame!!

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