Page 21 - Banking Finance May 2021

MUTUAL FUND

Aditya Birla Sun Life AMC manages 135 another scheme of the Kotak Mahindra said investments were directly routed
mutual fund schemes, several of which Mutual Fund or any other Mutual Fund through them. Digital mutual fund
have recorded superior performance without charging any fees. platforms can offer execution services
compared to industry averages, as well for users on behalf of advisory clients
as 6 domestics FoFs. It also provides SEBI rules may complicate without charging any commission or
portfolio management services, fees."
offshore funds and alternative mutual fund investments SEBI also added that mutual fund
investments through mobile apps platforms are mandated to only
SEBI has recently prohibited digital provide advisory services after an
Kotak Mutual Fund to mutual funds advisory companies such investment advisory agreement is

launch two Exchange as Paytm from charging signed with the client, containing
implementation fees from Asset certain terms and conditions directed
Traded Funds (ETF) Management Companies (AMCs) for by SEBI.
Kotak Mutual Fund has recently filed their mutual fund advisory services to "Mere online consent with a copy of
papers for launching two passive funds users. It has also stated that such the agreement emailed to the client's
- Nifty 100 Low Vol 30 ETF and Kotak investment advisory platforms must inbox will not be sufficient," the note
Nifty Alpha 50 ETF. sign an agreement with the client further added.
The Nifty 100 Low Vol 30 ETF will make before providing such advisory services,
investments in the constituents of the which might complicate the Aditya Birla Capital
index to generate returns that are investment process for some
commensurate with the performance consumers. planning for IPO for its
of the Nifty 100 Low Volatility 30 index, According to a guidance note by SEBI, mutual fund business
while the Kotak Nifty Alpha 50 ETF will the clarification comes after SEBI Aditya Birla Capital is planning a Dalal
invest in the constituents of Nifty rejected Paytm Money's request to Street debut, and meeting with
Alpha 50 index and generate returns avail reimbursement from AMCe bankers to plan the IPO of its mutual
that are commensurate with the whose direct mutual fund plans the fund business - Aditya Birla Sun Life
performance of the index. platform sells Asset Management Company.
The ETF units will be listed on BSE and Paytm Money allows retail investors According to the report, the company
all purchase and sale of units by and consumers to compare the is likely to file IPO documents with
investors other than Authorised expense ratio of direct and regular market regulator SEBI in April itself.
Participants and large investors will be plans of any mutual fund scheme and Notably, the Board of Directors of
done on the stock exchange. The NAV provides other services such as Know Aditya Birla Capital in March gave in-
has a reference value for investors and Your Customer (KYC) processing, principle approval to explore an initial
will be used by Authorised Participants technology hosting, among others public offering of the AMC.
for offering quotes on the stock which are critical to enable Aditya Birla Capital, in a recent
exchange. investments. However, it does not regulatory filing, said, "The board of
The Nifty 100 Low Vol 30 ETF will also charge advisory or any fees relating to directors of Aditya Birla Capital has
have exposure to equity derivatives of the execution of such services, as per provided its in-principle approval to
the index itself or its constituent the SEBI rules around fees. Now, SEBI explore an initial public offering of
stocks. The gross position to such has clarified that Paytm cannot charge Aditya Birla Sun Life AMC, a material
derivatives will be restricted to 5% of the AMCs any fees for the provision of subsidiary of the company subject to
net assets of the scheme. these services. market conditions, receipt of
The scheme may invest upto 5% of SEBI explained, "Paytm bears the cost applicable approvals and other
debt and money market instruments in that the AMC's are bearing in case the considerations." T

BANKING FINANCE | MAY | 2021 | 21