Indian mutual funds will soon have to report their monthly, quarterly and annual numbers to the regulatory authority (SEBI) in XBRL.

For doing this they need to buy a software which will convert their excel sheets into xbrl documents. This tool is a must because the returns have to go very often (MCR is a monthly report and is a complex document for example). So it is better to buy a tool, learn how to use it and start filing the return in xbrl format.

A mutual fund gets its data from at least 3 sources – the Registrar and Transfer Agent (Cams, Karvy CPL, Franklin Templeton, Sundaram BNP Paribas PSL, Escorts, Deutsche ISPL) the fund accountant (like Mfund) and some of the data that is self generated. The fund house has to collate this data and make the reports for SEBI.

Can this be out sourced? The answer is yes.

Should they outsource it? No. They should not. Why they should not is very simple. It is critical current and data with time lines. Also SEBI is giving them about 4-5 months to do ‘voluntary filing’ – this is the learning period.

So they should buy a tool, convert (learn to convert in say 2 days) the data and then send it to SEBI.

What about the annual return of the Asset Management Company – which is compulsory filing?

Well this is better outsourced! This is because the annual return is far more complex to tag – with block tagging, syntax errors, etc. Also this isĀ  a once a year kind of effort. The data is not at all strategic – after all the balance sheet is available on the website of all the mutual funds.

So the strategy should be – SEBI reporting do it yourself, but ROC reporting outsource it. Next year the ROC reporting prices are likely to be 50% of this years rates….my guess. I could be completely wrong if the taxonomy increases (which will) and the scope of tagging increases (it will!). However more number of people may be offering this service!

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  1. Its a pretty interesting topic of “whether to use a Tool (XBRL converter in this case) or to use an outsourced service provider”. We have been providing XBRL services for almost six years. Though we have been using the conventional outsourcing model to get the maximum benefit for our customers, we understand the current market demands (This includes the regulatory demand by the governing bodies). We are making it fairly simple for our clients and provide both options of giving the work entirely to us() or using our well established tool to work by themselves.

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