Regulator moves to make KYC a one-time process
The Securities and Exchange Board of India (SEBI) has released a circular via which it intends to make the Know Your Client (KYC) process a one-time affair for investors. It has said that an intermediary will perform the initial KYC of its clients and upload the details on the system of a KYC Registration Agency (KRA).
Post this initial verification, when the investor goes to a different intermediary for investment, the intermediary will verify and download the client’s details from the system of the KRA. This will thus eliminate the duplication of the KYC process once an investor has undergone the KYC process with a SEBI registered intermediary.
As of now, if an investor intends to have a business relationship with different intermediaries in the securities market, he has to repeat the KYC process as many number of times as the number of intermediaries he intends to have a business relationship with. To avoid this repetition, the regulator has developed a mechanism for centralization of the KYC records in the securities market.
For this purpose, SEBI has formulated and notified the KYC Registration Agency (KRA) Regulations, which cover the registration of KRAs, functions and responsibilities of the KRAs and intermediaries, code of conduct, data security, etc.
Bank of India to re-enter MF business
Bank of India (BoI) has agreed to pick up a 51% stake in Bharti AXA Mutual Fund for an undisclosed amount. Post the acquisition, Bharti Enterprises, which has about 25% stake in the fund house, will exit the asset management business while BoI will re-enter it, which it was last in 1990.
Fund manager changes
Birla Sun Life Mutual Fund has changed fund managers of some of its funds after Mr Hemang Dagli ceased to be key personnel of the AMC. Birla Sun Life Enhanced Arbitrage Fund & Birla Sun Life Infrastructure Fund with immediate effect. Birla Sun Life Enhanced Arbitrage Fund will be managed by Mr Ajay Garg while Birla Sun Life Infrastructure Fund will be jointly managed by Mr Mahesh Patil and Mr Naysar Shah.
New fund launches/NFO extension
L&T Mutual Fund has launched L&T Short Term Debt Fund with an investment objective ‘to generate returns for investors with a short-term investment horizon by investing in fixed income securities of shorter term maturity.’ The NFO period will be from December 7 to December 21, 2011. There will be no entry load charged while an exit load of 0.50% will be charged if units are redeemed on or before 6 months of allotment. The scheme’s performance will be benchmarked against CRISIL Short Term Bond Fund Index and will be managed by Ms Bekxy Kuriakose.
Sundaram Mutual Fund launched Sundaram Capital Protection Oriented Fund 3 Years (Series 7) with an investment objective ‘to seek income and minimise risk of capital loss by investing in a portfolio of fixed income minimise risk of capital loss by investing in a portfolio of fixed income securities.’ The NFO period for the scheme is from December 7 to December 19, 2011. The performance of the scheme will be benchmarked against CRISIL MIP Blended Index and the scheme will be managed by Mr Dwijendra Srivastava (debt) and Ms Srividhya Rajesh (equity).
Union KBC Mutual Fund has extended the NFO period of Union KBC Tax Saver Scheme to December 16, 2011 from December 9, 2011, as planned earlier.
Change in scheme structure, exit loads and plans
Reliance Mutual Fund will charge an exit load of 1% under Reliance Income Fund from December 7, 2011 if units are redeemed or switched out on or before completion of 6 months from the allotment. If the same is done after completion of 6 months but on or before completion of 1 year, then a load of 0.50% will be applicable, post which no load will be charged.
Reliance Mutual Fund has changed the minimum application amount in Reliance Regular Savings Fund - Debt Option - Institutional Plan from December 7, 2011 to Rs 3 crore per option and in multiples of Re 1 thereafter versus Rs 25 lakh per option currently.
Birla Sun Life Mutual Fund will charge an exit load of 0.50% under Birla Sun Life Dynamic Bond Fund from January 2, 2012, if units are redeemed or switched out within 180 days from the date of allotment. Further, a load of 0.25% will be charged if units are redeemed or switched out after 180 days but on or before 270 days from allotment.
Tata Mutual Fund will not charge any exit load under Tata Gilt Mid Term Fund from December 7, 2011. The exit load earlier was 2% if units were redeemed on or before 5 years from allotment.
IDBI Mutual Fund has introduced Regular Cash Flow Plan under the growth option of IDBI Monthly Income Plan from December 9, 2011. This plan will give unit holders the option of receiving regular income by way of either monthly/quarterly dividends on accumulated corpus or by way of Systematic Withdrawal Plan (SWP) given that the account value of investment is more than Rs 5 lakh or the duration of investment is more than 5 years.