The number of grievances or complaints from investors and distributors for the half-year ending September 30, 2023, was a mere 485, according to the Association of Mutual Funds in India (AMFI), the mutual fund industry body.
Of these, 428 complaints were received directly from investors or distributors and 57 complaints were received through the Securities and Exchange Board of India (SEBI).
The data shows that the number of complaints has gone down from last year when the total number of complaints received during the first half of the financial year 2022-23 were 619 of which 494 complaints were received directly from investors or distributors and 125 complaints were received through SEBI.
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SCORES is an online platform designed to help complainants to lodge their complaints, pertaining to the securities market, online with SEBI against listed companies and SEBI-registered intermediaries.
As per AMFI, these consistently low complaint numbers highlight the mutual fund industry's continuous efforts to elevate service quality and transparency, building a stronger foundation of trust among investors.
These complaints are broadly classified into routine and serious complaints based on the type and nature of complaints.
Venkat Chalasani, Chief Executive of AMFI, said, “We are pleased to share that the grievance against the industry and its distributors continues to remain minuscule. Remaining at the bottom of the table for customer complaints is a testament to the mutual fund industry's unwavering commitment to investor protection and satisfaction. AMFI remains dedicated to fostering a transparent and trustworthy environment for mutual fund investors."
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Every day grievances typically revolve around issues such as missing dividend payouts, absent account statements, commission delays, and outdated records. On the other hand, critical complaints encompass more severe infractions like application form manipulation, unethical marketing practices, fund irregularities, and significant service lapses by distributors.
As per AMFI, when it comes to addressing these concerns, standard complaints are promptly directed to the respective mutual fund companies or distributors for resolution, with guidance from the industry body. However, in cases deemed serious, explanations are demanded within a specific timeframe. Following this, matters are escalated to AMFI’s ARN committee, which evaluates and advises on suitable actions, ranging from commission suspension to the potential termination of AMFI Registration Number (ARN) licenses.
During the first half of the year, the net asset under management (AUM) increased from Rs 41.62 lakh crore in April to Rs 46.58 lakh crore at the end of September 2023 driven by favourable conditions, including a strong equity market, steady interest rates, and robust economic growth.
While the industry is growing at a fast clip, the data suggests that complaints against the MF industry are low.
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