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Centre’s move to encourage investors

— PHOTO: K. GOPINATHAN

INVESTING JUDICIOUSLY: (from left) A. P. Kurian, Chairman, AMFI, Anurag Goel, Secretary, Ministry of Corporate Affairs, Anil K. Agarwal, immediate past-President, Assocham, at the international mutual fund summit in Bangalore on Saturday.

BANGALORE: The Union Secretary for Corporate Affairs, Anurag Goel, said here on Saturday that the Indian Companies Act Amendment Bill was expected to be enacted in the winter session of Parliament, providing for ‘limited liability partnerships’ as recognised entities. “This will give such partnerships the same flexibility of operations as private limited companies,” he said.

Speaking at the mutual funds summit organised by the Associated Chambers of Commerce and Industry (Assocham) and Bangalore-based Chambers of Commerce, Mr. Goel said the Union Government would introduce in the coming months several measures to encourage retail investors. “One will be the website, watchoutinvestor.com, listing enterprises and individuals indicted for serious economic offences and another, changes in the professional tax rules regarding certain services such as chartered accountants and there will be broad changes in laws for protection of small investors in equity markets and mutual funds, without affecting their growth,” Mr. Goel said.

Whole-time Member of Securities and Exchange Board of India (SEBI), T. C. Nair, said any regulatory move proposed would be to grow confidence among retail investors in mutual funds. “With managed assets of 4.65 lakh crore from 33 million investors, we realise mutual funds have the power to correct any equity market fluctuations or run-off in capital by foreign institutional investors (FIIs), without a serious downslide on the overall economic health. Right now, the MFs are on a growth path but they have to be prepared for the entry of more overseas players in the coming years and more to grow their share in household savings from the current five per cent to a larger proportion,” Mr. Nair said. Issues that discouraged retail investors such as heavy entry and exit loads and asset management charges could be discussed and resolved, he felt.

PTI reports:

Attracting more and more investors from the household sector is a constant challenge before the MF industry, AMFI Chairman, A. P. Kurian, said. There is an urgent need to create a large distribution network of MFs vis-a-vis 20 lakh agents operating in insurance, he said.

Though the MF industry today has 1,200 outlets compared to less than 400 four years ago, it needed more outlets, he said.

Speaking on the occasion, Director (Capital Market), Ministry of Finance, M. S. Sahu, said in order to make small investors responsible for their investment decisions, the system needed to have an arrangement where an individual could learn the basics of finance.

He suggested the introduction of personal finance as a subject at the intermediate level.

From being metro-centric, MFs should move to smaller towns and even rural areas, Mr. Sahu said.

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