Sebi?s recent efforts to make MF investors? complaints public have helped highlight common grouses like non-receipt of dividends and account statements. In many cases of unclaimed dividends, MFs say the investors are not traceable. But the required effort has also been missing. That is probably why a 2000 Sebi circular said, ?the AMC should make a continuous effort to remind the investors through letters to take their unclaimed amounts.? For investors, the best way forward is to go for ECS facilities, whereby dividends are credited directly into bank accounts.

Non-receipt of account statements is also a perennial problem. Many investors don?t get account statements if they have registered their e-mail with the fund house. This is despite the fact that the investors prefer communication in hard copy. Plus, all the fund houses continue to charge the maximum permissible expenses?at least for equity-oriented schemes.

It is interesting to note how some fund houses differentiate between investors. Investors are categorised as ?dormant? and ?active? based on the nature of investing. Why the bifurcation? This is to let the ?dormant? folk sleep over the investments, which enables the fund houses to earn easy management fees year after year. ?Active? investors are regularly prompted about making further investments. Investment performance is regularly communicated to them. The MFs logic: why wake up the dormant investor with details concerning investments when these details may make him reconsider the investments?

All said and done, Sebi?s new disclosure norms are welcome even though they could do with some tweaking. For instance, Sebi could have its own grievance redressal mechanism, which would be independent of MFs and akin to what Irda has done. A tight redressal deadline could be set to ensure that issues don?t remain inordinately pending. Current data show that 96% of complaints are addressed within 90 days. Also, the category of complaints needs to be widened as far as reporting formats are concerned. Currently, Sebi mandates only 13 categories as compared to Irda?s 50. Almost 49% of the MF investor complaints fall under the ?others? category, which needs proper unpacking.

muthukumar.k@expressindia.com