AMFI Says Mutual Funds Are Investigating June 4 NAV Issue
All institutions involved in these transactions have said they are not responsible for the glitch.
Several mutual fund investors, who attempted buying on the dip when equity markets crashed on June 4, were left disappointed after they were allotted units at the net asset value or price of the next day. The Association of Mutual Funds in India has forwarded representations from investors to mutual fund houses and they are working on it, said Venkat Chalasani, chief executive officer of the industry body, on a conference call on Monday.
“In terms of the SEBI guidelines, they are very clear,” Chalasani said, explaining the regulations. “It states that whenever the AMCs receive (inflows, if the AMC are receiving the money before 3 p.m., for that only, they will be giving the allotment of units for that particular day. If it is given after the cut-off time, then the next day’s NAV will be allotted.”
He clarified that the allotment of units in a mutual fund scheme is not done based on the time when the account is debited but rather at the time that the mutual fund house receives the money.
“So, wherever there are complaints and wherever representations are being made by people, we have forwarded them to the AMCs. AMCs are working around it and are looking at it and in case they have received the money earlier, they will give that day’s NAV,” he said.
The most probable cause of the disruption was a delay in the processing of transactions because some banks and payment aggregators were unable to handle the flood of orders, according to the chief operating officer of a domestic investment platform, who spoke on condition of anonymity. This occurred because order volume shot higher on the day of the results of the recently concluded Lok Sabha elections.
All institutions involved in these transactions—including BSE StAR MF, the online order collection system that is responsible for the bulk of mutual fund orders—have said they are not responsible for the glitch.
“Many private, public and corporate banks around the country do not have real-time transactions and I’ve asked my team what we can do so this does not happen in the future,” said Kalpen Parekh, managing director and chief executive officer of DSP Mutual Fund, in an interview with NDTV Profit. “We need to investigate and figure out where, in the process, this leakage is happening. Where is the money getting delayed from—the investor to the aggregator and then to the MF scheme account—and how can we solve that.”
Ultimately, the market regulator and the banking regulator will likely have to step in to resolve investor grievances, with all parties currently refusing to accept responsibility. For now, investors looking for redressal can log on to the SEBI Complaint Redressal System website and make a complaint.
