MONEYLIFE SURVEY: Mutual fund investors from US and Canada facing difficulty for purchases
Our online survey on “Foreign Account Tax Compliance Act (FATCA) declaration” shows that nearly 40% of US and Canada investors are unable to make new or existing folio purchase since the FATCA declaration came into existence one year ago. The number of respondents not able to purchase in the last three years has been at 50%. Some asset management companies (AMCs) have actually started accepting investment from US and Canada since end of 2015. It means FATCA declaration has nothing to do with difficulty for US and Canada investors. The reason for AMCs stopping investment from US and Canada investors three years ago is the lack of registration with US Securities & Exchange Commission (SEC).
 
Half of the US and Canada investors have filed FATCA declaration with Karvy, CAMS or AMCs. Surprisingly, only 65% were honest about declaring US and Canada resident or person status along with details of tax identification number in US and Canada. It means many US and Canada investors do not want to disclose their status to avoid AMCs from stopping them from investing. But, it is a dangerous move as making dishonest declaration can come back to bite in future. Beware of it and make an honest declaration, while investing with any financial institution.
 
Nearly, 14% of US and Canada investors say that they have been forced to redeem their existing folio by AMCs since January 2016. It is possible, but the AMCs who responded to Moneylife cover story questions denied such a move. US and Canada investors are certainly having a difficult time investing in Indian AMCs. The good old days before 2013 for US and Canada investors are finished. The future is uncertain.
 
Nearly, half of the respondents were not asked for their FATCA declaration by brokerages, banks, real estate developers and other financial institutions. It means that FATCA declaration which MF industry has been getting from investors is not as much an issue with other financial institutions. Moneylife survey had US and Canada investor respondents staying in US and Canada residents and US and Canada person who are not residing in US/Canada. Apart from US and Canada cities, the respondents were mainly from Mumbai and Pune.
 
Read Moneylife cover story – “Beware! Investors in Indian Mutual Funds from US & Canada” 
 
Comments
Suketu Shah
9 years ago
These are the things one expects when you have a FMinister like we have.The main problem in current govt is our Finance Minster as Dr Swamy rightly said.Everything else is working very well.
Nishesh Jambudi
9 years ago
As USA citizen I have very hard time to reset password to buy mutual fund. I have no idea how to deal this.
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