Here is a list of 18 consumer benefits with respect to investing that has changed over the years:
Entry Loads: The Sebi abolished entry loads on mutual fund investments from August 1, 2009.
Direct Plans: Sebi mandated all AMCs to introduce direct plans in their existing schemes from January 1, 2013, which would have a lower expense ratio.
Investor Education: Sebi mandated AMCs to set aside 2 basis points (0.02 per cent) of daily NAV on an annual basis and spend it on investor education and awareness initiatives from September 13, 2012.
FMP:Fixed maturity plans or FMPs attained peek popularity in 2007 by AMCs to attract short-term corporate deposits. Their similarity to FDs resulted in them being preferred by even retail investors. As these became a rage as alternates to FDs, finance minister Arun Jaitley announced a change in the way long-term tax was calculated when investing in debt funds from 1 year to 3 years, thus denting the FMP’s tax attractiveness.
Monthly Factsheet: In 2007, Sebi advised the AMFI to standardise the content of Factsheet so that investors weren’t confused by various formats across fund houses.
KYC and then E-KYC: Know Your Client (KYC) requirement under Prevention of Money Laundering Act, 2002, was made mandatory for investments in mutual funds by Sebi effective January 1, 2012. An extension of the cumbersome process has been the e-KYC or electronic KYC that came into existence in January 2016.
Combined Account Statement (CAS): The interim Budget in 2014 set the move to create one record for all financial assets of every individual. Sebi had extensive deliberations with the Depositories, AMFI and RTAs of Mutual Funds (MF-RTAs) to implement the aforesaid concept with respect to financial assets in respect of securities market. As a first step in this direction, it has been decided to enable a single consolidated view of all the investments of an investor in securities held in demat form with the Depositories as well as in Statement of Account (SOA) form with Mutual Funds (MF). The statement enables investors to have a consolidated view of his/her financial assets and provide an insight of their portfolio across various asset classes.
Follo: These are numbers designated for individual investor accounts, though one investor can have multiple accounts.
SIP/STP/SWP: The systematic—investment plan (SIP), transfer plan (STP) and withdrawal plan (SWP) are all convenient ways for investors to invest in mutual funds and use their mutual fund investments to suit their needs.
Dematerialisation: The concept of demat, or an electronic record of share certificates, was introduced in 1996. Currently, all trades are settled in demat format; however, certain sections of the market continue to hold physical certificates.
E- Broking: The turn of the century witnessed a flurry of e-broking providers that changed the way one traded in shares. Over the years the e-broking has moved from websites to smartphones and their offerings have gone beyond shares into deposits, mutual funds and even gold.
Retail Allocation: In 2010 the SEBI increased the investment limit in initial public offer (IPO) and follow-on offer (FPO) to Rs.2 lakh from Rs.1 lakh for retail investors.
ASBA: Application Supported by Blocked Amount or ASBA was introduced in May 2010 by SEBI as an investor-friendly way to apply for any IPO. The ASBA is an interface which ensures that your any IPO. The ASBA is an interface which ensures that your funds leave your bank account only when you are allotted shares in public issues. Within this period, you will continue to earn interest on your savings account.
Mobile Application: Both the BSE and the NSE introduced mobile apps in 2014 with the changing trend and usage by traders and investors alike to help them keep a ready tab on their investments.
Investor Protection Fund: The Investor Education and Protection Fund (IEPF) was set-up from the amounts which remained unclaimed for a period of seven years from the date they became due for payment such as unpaid dividend accounts of the companies; the application moneys received and due for refund; matured deposits and so on. The fund has been established with a view to support the activities relating to investor education, awareness and protection.
LTCG : It was in 2004, when the long-term capital gains on equity investments was charged as nil when investments held for a year were sold through recognised stock exchange to encourage equity investing.
Riskometer: In March 2013, the SEBI had asked AMCs to use product labels, which had to display colour box, depending on the risk levels. A blue box meant the principal amount would be at low risk, yellow meant medium risk and brown meant high risk. The riskometer changed from colours to a risk grade in 2015, which is a different form of risk level label—“low”, “moderately low”, “moderate”, “moderately high” or “high.
Minority Shareholders Right: Shareholders today have a very strong say. This power was vested to them after the 2013 overhaul of India’s corporate governance rules, which clamped down on related-party transactions benefiting majority shareholders. This also beefed up the role of independent directors and audit committees on company boards.
