Following the Sumit Bose committee report recommending to allow mutual fund houses to manage both Ulip funds as well as retirement funds, the industry is bullish to manage more funds.
The committee has also recommended that there can be various regulators for the same product keeping in view the different functions of the product, for instance it wants Sebi to regulate the investments made by Ulip funds, while IRDA to regulate the insurance part of the same fund.
The Sumit Bose committee report also wants MFs to manage the investment part of a Ulip launched life insurers.
Currently, Ulips are regulated by the insurance regulator Irdai, while MFs are controlled by the markets regulator Sebi.
These issues may come up for discussions during the forthcoming meeting of AMFI which is slated for September 16 here, according to the industry.
Franklin Templeton Investments that manages funds worth Rs 74,312 crore as of end June, said it favours the Sumit Bose panel recommendations that seeks to allow fund houses to manage insurance and pension assets.
“Our view is that fund houses should be allowed to manage insurance and pension assets as is the case the world over. The respective regulators can set the rules for various market participants to follow,” Franklin Templeton Investments India managing director Vivek Kudva told PTI.
“There is no harm in having separate regulators for asset managers, insurers and pension funds. However, everyone’s focus should be on increasing penetration and financial inclusion whilst ensuring adequate oversight and a fair deal to investors,” he said.
He further said, “Some of these topics may come up for discussion during the forthcoming meeting of Amfi on September 16.”
Sundaram Mutual, which currently manages about Rs 24,000 crore funds, is also in favour of fund houses managing Ulip funds.
“Insurers are still doing fund management job what MF houses should ideally be doing,” Sundaram Mutual chief executive Sunil Subramaniam said.
SBI MF, which is set to cross the Rs 1 trillion-mark of funds anytime from now from Rs 90,000 crore, also favours having separate regulators for the same product.
“The panel has voiced for having one regulator for one particular function, not for a product. Ulip has a life insurance component so it should be regulated by the Irda. It also has an investment part, which must be regulated by Sebi,” SBI Mutual Fund managing director and chief executive Dinesh Khara said.
As per data collated by the Life Insurance Council, total investments made by life insurers in 2014-15 was at Rs 22 trillion and out of that Rs 3.62 trillion was invested from Ulips alone.
Similarly, life insurers were managing pension funds at Rs 2,000 crore as of end March 2015.
Besides, total AUM of retirement fund currently managed by seven pension fund firms and being regulated by the PFRDA in retail alone currently stands at Rs 700 crore.