The Unit Trust Association (UTA) is to present a proposal to the Securities and Exchange Commission (SEC) on increasing awareness of their industry to attract retail investors to the stock exchange.
UTA President P. Asokan told Daily FT that the decision was taken at a meeting held with SEC Chairman Dr. Nalaka Godahewa on Tuesday. He noted that 13 fund managers participated at the discussion and the UTA would hold a meeting next week to decide what aspects should be included in the detailed proposal to be presented to the SEC. The SEC has expressed willingness to fund the campaign during the meeting.
Describing the meeting as “positive” and “very responsive,” Asokan pointed out that there was greater acknowledgement of the fact that unit trusts could be the ideal vehicle for retail investors to involve themselves in the stock market.
“Unit trusts operate on a small fee of 0.5%-1.5% so it is hard for individual companies to find adequate funds to carry out awareness campaigns. There has been a longstanding request to the SEC to assist with this aspect and it was decided at the meeting that the UTA would come up with a detailed marketing plan to present to the SEC,” he said. Asokan pointed out that investments of small-time investors could be better managed if they were infused into the stock market through unit trusts.
Earlier, a separate wide ranging proposal was submitted by the UTA to the SEC, which Asokan stated would be addressed jointly with the Central Bank, Finance Ministry and Inland Revenue Department.
“There are several medium-term and long-term policy issues highlighted in the proposal. These include liberalising foreign investments in unit trusts and permitting pension funds to invest in the industry.”
It was also agreed at the meeting that the UTA and the SEC would have regular meetings every three months to discuss issues of mutual interest.
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SEC to encourage retail investors through unit trusts