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Complaints to MFs fall on classification rejig

Sneha Padiyath Mumbai | Updated on June 29, 2011 Published on June 29, 2011

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AMFI move to bring uniformity





Complaints registered with mutual fund houses saw a sharp drop of 74 per cent in fiscal 2010-11 owing mainly due to changes in the classification of complaints. The total number of complaints at the end of the 2009-10 fiscal was 3.9 lakh; this declined to 1.02 lakh in 2010-11.

For example, if an investor applies for redemption and follows it up on the second day to check on the status, this will no longer be deemed a complaint. Earlier any such phone call was considered a complaint, leading to an extraordinarily large number of complaints.

To counter this confusion, AMFI along with its members formed an operations committee which passed Circular no. 21 of the AMFI Best Practices guidelines to bring about uniformity in the complaints registered. This circular deals with guidelines on the standardisation of complaints and grievances reporting procedure. This circular which serves more as a framework broadly defines a complaint as any issue which has exceeded the time specified for its redressal.

“The drop is not necessarily because of the efforts of the fund houses alone but also because of the change in the categorisation of complaints. Not every fund house was reporting all complaints,” said a mutual fund official who did not wish to be named. But the intention of the fund houses was not deceit. It's just that the thinking differed from one fund house to another, he clarified.

The categories of complaints were non-receipt of dividend on units, interest on delayed payment of dividend, non-receipt of redemption proceeds, interest on delayed payment of redemption, non-receipt of statement of account/unit certificate, discrepancy in statement of account, non-receipt of annual report/abridged summary, wrong switch between schemes, unauthorised switch between schemes, deviation from scheme attributes, wrong or excess charges/load, non-updation of changes viz. address, PAN, bank details, nomination, etc and others.

Of the 43 fund houses, 12 have seen a spike in the number of complaints while 26 have seen a drop in the number of complaints received. Fund houses such as Birla Sun Life, ICICI Prudential, Fidelity and JP Morgan have seen a near 100 per cent reduction in the number of complaints received. The majority of the complaints were dealt within 30 days of being received.

“Fund houses are working proactively towards redressal of the complaints received and taking high cognisance of that,” said Mr Arindam Ghosh, Head - Retail Sales, JP Morgan Asset Management.

While these categories haven't changed, it is the “Others” column that perhaps created the confusion. The category has declined by 81 per cent in the complaints registered. The total number of complaints in this category has decreased from 1.9 lakh in 2009-10 to 36,215 in 2010-11.

The disclosure of the complaints received by fund houses was made mandatory by SEBI in 2010.

Complaints against non-receipt of statement of accounts has fallen the most in the “others” category which declined by 1.5 lakh over 2009-10 data. The drop in the category was by 81 per cent in 2010-11. Non-receipt of dividend on units saw the second highest decline of around 51,000 complaints which was also an 81 per cent drop over the previous years' numbers. The third highest drop was in case of complaints against non-receipt of redemption proceeds which saw the number of complaints decline by around 40, 000 – a 71 per cent decrease over last year's data.

Published on June 29, 2011
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