Likely to go online in the first half of 2013
Capital markets regulator SEBI has cleared the proposal for the launch of AMFI’s mutual fund transaction routing platform. The platform will provide investors with a common account number (CAN) so that investors can invest across schemes and fund houses using this number.
The MF utility platform will also have a single cheque payment system and common account statement for all the schemes that investors have invested in across fund houses. At present, investors need to have to give separate cheques for making investments in each scheme.
The platform, called MF utility is expected to go online in the first half of 2013. It would be a one-stop shop for the sale and purchase of mutual fund schemes.
“We expect the platform to be up and running in the April-June quarter next fiscal. This platform will provide seamless mutual fund transaction processing with a single account system and will also be cost-effective,” said V. Ramesh, Deputy Chief Executive, AMFI (Association of Mutual Funds in India).
AMFI received clearance from SEBI after “clarification of some queries”, said Ramesh. Officials of the industry body were concerned that asset management companies (AMCs) investing capital in the development of the platform would be violating SEBI norms which bars AMCs from investing in other companies.
Ramesh also said that fund houses will not be compelled to be a part of the platform. “There is no compulsion that all fund houses have to be a part of it. But I don’t think any fund house would choose to stay away from it as it will help save costs and also be of convenience to both investors and distributors,” he said.
Using this platform, investors will have the ease of sending scanned copies of the required application for investment with a promise to deliver the originals within the next few days. Officials claim that there will be no change in the role played by distributors or registrars and transfer agents.
They added that the convenience of online submission of documents would encourage higher rural penetration among distributors and independent financial advisors.