Page 15 - BANKING FINANCE OCTOBER 2021

MUTUAL FUND

Sebirevises risk manage- for the risk management of specific many of which are part of our day to
functions of the AMC/Mutual Fund. day lives like Apple, Microsoft,
ment framework for mu- Forinstance, there should be dedicated Facebook, Alphabet, Facebook,
tual funds risk officers for various key risks such as Netflix, Starbucks. This offering is suit-
In order to ensure mutual funds main- Investment Risk (by Chief Investment able for investors looking for geo-
tain high standards, exercise due dili- Officer), Compliance Risk (by Chief graphical diversification in their equity
gence, ensure proper care in their op- Compliance Officer), Operational Risk allocation in Index Funds."
erations and to protect the interest of (by Chief Operating Officer or similar
investors, market regulator securities functionary responsible for the respec- Mutual fund industry to
and exchange board of India (Sebi) has tive functions overseen), Cyber Security see many mergers in next
come up with a revised risk manage- (by Chief Information Security Of-
ment framework for fund houses. ficer)," said the circular issued by the couple of years, says
regulator.
The said framework will be effective Aditya Birla Sun Life AMC's
from January 01, 2022, and asset man-
agement companies (AMCs) must per- ICICI Prudential Mutual CEO
form a self-assessment of their RMF Fund launches NASDAQ The Rs. 36 trillion mutual fund indus-
and practices and come up with a try, in India, with 44 players may see
roadmap for implementation of the 100 Index Fund onsolidation happening in the next
framework. ICICI Prudential Mutual Fund has an- couple of years considering the major-

Sebi says AMCs must establish a RMF nounced the launch of ICICI Prudential ity of the market is held by the
country's top 10 fund houses.
for its mutual fund business and that NASDAQ 100 Index Fund, an open-
will be an integral part of the mutual ended index fund replicating the As of June quarter 2021, the top 10
NASDAQ-100 index®. The scheme pro-
fund's processes and governance mutual fund companies held 82% of the
framework, at both the operational vides exposure to 100 largest globally market share, as per Association of
and strategic level. leading non-financial companies and Mutual Funds in India (AMFI) data.
aims to track returns of the NASDAQ-
The objectives of RMF, according to 100 Index®, subject to tracking error. The fourth largest mutual fund (MF)
Sebi, should assist the management company Aditya Birla Sun Life AMC,
and the Board of Directors of both Speaking on the launch of the product, which opened its IPO on September
AMC and Trustees in demonstrating Mr. Chintan Haria, Head- Product De- 29, alone holds over 8% market share.
high standards of due diligence in daily velopment & Strategy, ICICI Prudential Commenting on the increasing compe-
management, promoting proactive AMC said, "ICICI Prudential NASDAQ tition as new players are entering the
management and early identification 100 Index Fund is the first global based industry, A Balasubramanian, managing
of risk. offering in our passive universe. It is an
open ended index fund that aims to director and chief executive officer at
The market regulator has also said risk track the NASDAQ-100 index® and rep- Aditya Birla Sun Life AMC said in con-
management will be an independent
licate the performance of its constitu- versation with Business Insider that,
and specific function of the AMC. ents. Nasdaq-100 Index® mainly in- "The MF industry will witness consolida-
"There should be at least one CXO cludes innovation led technology and tion in the next 3-4 years of players who
level officer identified to be responsible communications services companies; won't be able to survive." T

‘Buy now pay later’ loans to disrupt mkt

Buy now pay later or BNPL loans are set to disrupt the credit market, with technology making it easy for lenders to
provide sachet-ticket loans, without the risks or costs associated with lending to this category. BNPL refers to the
techenabled credit that is extended to borrowers at the point of sale as a payment option. Unlike credit cards, the
credit decision is taken on the spot using technology for the sale amount. “With BNPL, banks and other lenders can
reimagine credit. It is like providing sachet-sized credit lines to customers without having to bear the cost of credit-
card infrastructure or the extensive process related to personal loans,” said Yezdi Lashkari, founder Flexmoney Tech-
nologies — a company that enables BNPL loans for top banks in the country.

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