The mutual fund industry will play an important role in financial inclusion and the capital markets watchdog is committed to the growth of mutual funds as a vehicle for such inclusion, said Madhabi Puri Buch, chairperson, Securities and Exchange Board of India (Sebi).
Speaking at the annual board meeting of Association of Mutual Funds in India (AMFI), Buch called the industry “SEBI’s elder son (Bada Beta)”.
“This is the future we envision for every citizen, where wealth creation is accessible," she said while highlighting AMFI's success and added that the success stems from several factors, including the commitment of experienced professionals. "If it were merely an administrative setup, it wouldn’t have the credibility with regulators that it does," she said.
She further added that another reason they really like mutual funds is because of their role under the Stewardship Code.
“The reality is that the retail investor, even today, does not vote in AGMs. He does not have that power in order to really assert himself as a shareholder of the company. So the stewardship code, which has been adopted by the industry, both ours and the insurance industry, we believe that there is huge value in this, and therefore all the more that this as a vehicle of working towards ensuring that the investor has a voice and that their voice is heard, and that the entire ecosystem works in the interest of the shareholders,” she said adding that she has a lot of faith and expectations from the mutual fund industry in respect of carrying forward and strengthening the stewardship code.
Buch also spoke about development of the bond market while highlighting that the segment was Rs 20,000 crore a month in size. “We are waiting some approvals from RBI. Hopefully that number will go up even more,” she said.
The building blocks she noted includes the introduction of an online bond platform to democratize access to fixed-income investments. "By reducing information asymmetry between privately placed and publicly placed debt, we are encouraging growth and liquidity in the bond market," she said.
Buch also spoke about the need for technology in streamlining regulatory processes. "At SEBI, we have about a dozen AI projects underway to facilitate faster approvals and improve efficiency," she added.
Collaboration, she noted, will continue to be key for the industry growth. "If we continue to work together, there’s no stopping this industry and the wealth creation it can achieve for every citizen of this country," she said.
As part of the event, AMFI and the chairperson announced the launch of two new initiatives to promote investor education. One, an essay competition – Bharat Nivesh Young Minds Essay Competition -- and a fleet of four interactive travelling Kiosks in order to engage with communities and create awareness (Bharat Nivesh Yatra).
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