Expressing displeasure over disclaimers in mutual funds (MFs) television commercials rushing through even before the viewer can actually read them, Commerce and Consumer Affairs minister Piyush Goyal on Wednesday said that critical information regarding the financial instruments should be run at the same speed as that of the commercial.
Mr Goyal even went on to say that he is willing to change the regulations if needed to ensure that the over Rs 37 lakh crore MF industry falls in line.
“They (the commercials) read out the disclaimer very, very fast which you can’t even understand. The disclaimer should be prominent and at the same tone or speed as the rest of the advertisement. You can’t rush through a disclaimer, it loses the purpose of the disclaimer,” Mr Goyal said while addressing a national stock exchange (NSE) event.
He asked NSE to get in touch with asset management companies on this issue and also offered changes in regulation to enable it.
“If you need any help, I am happy to arrange for it through consumer protection rules from the consumer affairs ministry or the consumer protection laws,” he said.
“But it is imperative that investors should know or invest with their eyes open when they are coming into the exchange or any (financial) product,” the minister added.
Earlier, he asked the stock exchanges to evolve a common know your customer (KYC) platform which can be used by a variety of financial entities and can ensure swifter entry of an investor or participant on to a platform.
Mr Goyal said the ministry itself took inspiration from a system for admissions into American universities which rely on add-on information to be furnished depending upon a particular varsity or course sought by a candidate, and a similar one can be explored by the financial sector.
“I’d urge you to consider and engage with regulator or banking system to simplify the rules (on KYC) to ensure more people come in into the system,” he said, adding that some amount of self-regulation should also be looked at.
Goyal further said financial products have to pass through the prism of trust, transparency and accountability, and asked stock exchanges to be cognizant of the same to attract flows from retail and institutional investors.