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SCAN through the financial section of any newspaper which details the net asset values of mutual fund schemes, and you will see that the variety of products and options offered by mutual funds has multiplied enormously in recent times.

Clearly, it is becoming more important than ever, for investors to have more information on which mutual fund products best suit their needs. And if the persons marketing mutual fund products are to vend the right kind of products to investors, they need to have more than a fair understanding of how the equity and bond markets operate, apart from the risk and return characteristics of the various funds on offer.

But the present distribution set-up for mutual funds is largely unorganised. In fact, no minimum qualification or training is stipulated for mutual fund intermediaries.

And the worrying part is, efforts by SEBI to subject mutual fund intermediaries to a certification and registration process is moving at a snail's pace. It has been a full three years since the Association of Mutual Funds of India (AMFI) first kicked off a voluntary certification programme for mutual fund intermediaries in 2000.

In September 2001, SEBI made it mandatory for all mutual fund intermediaries to acquire AMFI certification. SEBI also allowed existing distributors and the sales personnel of mutual funds time until March 2003 to clear the certification test.

But the March 31, 2003 deadline has gone by and SEBI has announced yet another six-month extension in the deadline by which the intermediaries have to acquire the AMFI certification.

What is more, SEBI says it has extended the deadline at the behest of some distributors and the "MF industry", which ought to be doing more to ensure that investors get a fair idea of what they are buying when they decide to invest in a MF product.

Perhaps, stringent regulatory oversight, such as the kind the IRDA practises with insurance agents, is what is needed to push the certification process for MF intermediaries forward.

Not only does the IRDA stipulate 100 hours of training and an exam for all marketers of insurance products, it also lays down a list of do's and don'ts which insurance agents have to adhere to while selling insurance products. And non-adherence can lead to revocation of the agent's licence.

Aarati Krishnan

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