JOIN USMarket regulator Securities and Exchange Board of India (Sebi) will ask fund houses "to enhance the online investment facility and tap the Internet savvy users to invest in mutual funds" under its new long-term policy for mutual funds, which has been approved by the Sebi board and will soon be made public.
In its draft proposals, Sebi made it clear that a greater use of Internet as a distribution channel could help increase the penetration of mutual funds, especially among young investors.
The regulator is of the view that with a growing number of people using Internet for banking, shopping and ticketing needs, it wants mutual funds to increase the use of online medium for sale of investment products.
Sebi said that the online phenomenon is increasing rapidly as more and more people prefer to carry out most of transactions online. “This phenomenon brings opportunities for mutual funds to tap this segment of population by offering them an option to invest online using Internet,” the draft proposal said.
Even as the regulator conceded that many fund houses currently are offering facility for online investment, it felt that there was a need to promote and make it more user-friendly for investors by improving infrastructure and efficiencies. “Online distribution not only increases customer convenience, but also significantly improves distributor economics," it said.
Sebi would also ask mutual funds to tap the burgeoning mobile-enabled Internet users for direct distribution of investment products.
As per an estimate, the number of Internet-enabled mobile phones in the country is expected to reach 300-400 million in 2015.