SEBI mandated single platform for all mutual fund services
Investors will be able to access these services for all mutual funds in an integrated manner and over period of time the platform will also provide services to the distributors, registered investment advisors, AMCs, stock exchange platforms and digital platforms for transacting in mutual funds
Ease of investing has been one of the key virtues of mutual fund investing. To make it more convenient for the existing and future investors to undertake all their mutual fund transactions, capital market regulator Securities and Exchange Board of India (SEBI) has asked mutual fund registrar and transfer agents (RTAs) to develop a common industry-wide platform which will help in purchasing, redeeming, and storing investment details of all mutual fund holders. So, instead of going submitting documents at multiple AMC’s now, investors can now submit the documents in one place through this platform. The new platform will be operational by December 31, 2021 and SEBI told asset management companies (AMCs) and depositories to help the RTAs for development of the proposed platform. SEBI also wants all the key stakeholders including Association of Mutual Funds of India (AMFI), AMCs, RTAs and depositories to create investor awareness initiative about this new platform.
In the last few years there are several platforms which enable mutual fund investors to do transaction. Like for instance, there are two RTAs in the country – Karvy (KFinTech) and Computer Age Management Services (CAMS). There are AMC website, stock exchange platforms BSE Star MF and NSE’s NMF, MF utility by AMFI, Groww, Paytm, and more.
According to SEBI, the new platform will provide a single-window, integrated, simplified investment and service experience for the investors. The platform will execute mutual fund transactions such as purchase, redemption, switch etc., initiation and tracking of service requests viz. change of email id /contact number / bank account details etc., initiation and tracking of queries and complaints, access investment related reports viz. mutual fund holdings (both in demat and standard statement of account), transactions reports (including historic transactions), capital gains/loss report, details of unclaimed dividend/redemption etc.
Investors will be able to access these services for all mutual funds in an integrated manner and over period of time the platform will also provide services to the distributors, registered investment advisors, AMCs, stock exchange platforms and digital platforms for transacting in mutual funds to further augment ease of investing. As the platform involves significant data centralization, concerns about cybersecurity remains. Hence, the regulator has emphasised on building robust, scalable, Application programming interface (API)-based platform with cybersecurity protocols in place with the implementation of Cyber Security and Cyber Resilience framework, which is specified by the market regulator to various MIIs (Market Infrastructure Institutions) like stock exchange, clearing corporations, and RTAs.
The new proposed platform will be one-stop for the investors to conduct all their financial and non-financial mutual fund transactions. The obvious question would be how it will be different from already existing similar platform. The clarity which we will get once the new platform will become operational. The good part is investors is likely to get one more integrated platform offering all the mutual funds services. The new platform will help to reduce the duplication of efforts, mitigate the cyber security threats and also take digitisation of transactions to next level.