SEBI Chairman Tuhin Kanta Pandey said that the relatively patient behaviour by mutual funds as anchor investors compared to FPIs is an encouraging indication of the role long-term domestic institutional capital can play in Indian markets. He was addressing the AMFI Annual General Meeting.
Prioritising Investor Outcomes
While calling increasing participation of Indian households in mutual funds encouraging, Pandey added that the success of the mutual fund industry cannot be measured only by assets under management but by investor outcomes, which he believes would define the next phase for the industry. He asked the industry to focus on deepening participation, adding that the next generation of investors will increasingly come from smaller towns, first -time investors and under-represented segments.
Pandey also asked asset management companies (AMCs) to ensure that their fiduciary responsibility is reflected across the value chain. To ensure investor interest, he asked fund houses to place strong internal controls to identify risks early. He also asked innovation in investment process through use of artificial intelligence and technology to be supported by sound governance, transparent claims and clear accountability. Pandey also emphasized the importance of mutual fund trustees in strengthening the mutual fund governance architecture by reviewing key processes and identifying emerging risks earlier.