Mutual fund disclaimers should circulate at the same speed as the rest of the announcement: Piyush Goyal

Angered by mutual funds rushing through warnings in TV adverts, Union Minister Piyush Goyal said on Wednesday that critical information should flow at the same speed as other advertising.

The Commerce Minister, who also holds the consumer portfolio, added that he was willing to change the regulations if necessary to ensure that the MF industry of more than Rs 37 lakh crore comes into line.

“They (ads) read the disclaimer very, very quickly, which you can’t even understand. The disclaimer should be prominent and in the same tone or speed as the rest of advertising. You can’t rush into a disclaimer, it loses the purpose of the disclaimer,” Goyal said at an NSE event.

He asked the nation’s largest stock exchange to engage with asset management firms on the issue and also proposed regulatory changes to allow this.

“If you need help, I’ll be happy to arrange it through the Consumer Affairs Department’s Consumer Protection Rules or Consumer Protection Laws,” he said.

“But it is imperative that investors know or invest with open eyes when going public or any (financial) product,” the minister added.

Earlier, he asked exchanges to develop a common know-your-customer (KYC) platform that can be used by various financial entities and can ensure faster entry of an investor or participant on a platform. -form.

Goyal said the department itself was inspired by an admissions system to American universities that relies on additional information to be provided depending on a particular university or course an applicant is seeking, and a similar system can be explored by the financial sector.

“I urge you to consider and engage with the regulator or the banking system to simplify the rules (on KYC) to ensure that more people come into the system,” he said, adding that a number degree of self-regulation should also be considered. .

Goyal further said that financial products must go through the prism of trust, transparency and accountability and asked exchanges to take this into account to attract flows from retail and institutional investors.

Goyal, who also manages the textiles portfolio, said only 12 companies have been consistent over the 25-year run of NSE’s 50-share Nifty benchmark index and that the composition from a sector perspective shows interesting trends.

Without mentioning the sector’s performance, he said the textile industry had “food for thought” from the data.

Goyal also advocated for safeguarding the interest of small retail investors and MSMEs by improving their financial literacy, encouraging a shift in sentiment from speculation to diversification, bringing ease and simplicity in launching products in languages regions and working with schools and colleges to impart investment skills at an early age.

Reducing volatility and sudden spikes is necessary to broaden the investor base and induce strong capital formation, he noted, adding that it is important to follow international best practices so that domestic players can integrate with global exchanges and financial systems.

“When we talk about business deals, then we can try to get recognition for your KYC, for your processes in international markets and possibly India can also consider accepting KYC or registrations in developed countries. .. like Nasdaq or Nikkei, or some of the reputable stock exchanges and ultimately India should aim to be among the top three stock exchanges in the world,” he added.

Dolores W. Simon