If you want to invest Rs 10,000 each in five different mutual fund schemes, just write a single cheque of Rs 50,000 instead of five different cheques and the money would be allocated in the desired schemes.
This is not possible now, but with the launch of the Association of Mutual Funds of India's (AMFI's) transaction platform-MF Utility- you might soon be able to do so.
The Securities and Exchange Board of India (SEBI) has recently given its nod to AMFI's transaction platform, which is expected to be operational by first half of 2013. MF Utility is an order routing platform that offers a single window to both investors and distributors to transact with multiple fund houses.
There are 44 fund houses, and distributors and at times investors have to deal with individual fund houses for any buy-and-sell transaction. With MF Utility in place, investors and distributors can route their order through it without having to go through duplication of processes such as filling multiple forms and issuing separate cheques for separate schemes. Investors can use a common account number (CAN) for all mutual fund transactions.
Deputy chief executive of Amfi V Ramesh says, "This will not only make investment in mutual funds hassle-free, it will also streamline the whole back-end process at the mutual funds' and the registrar and transfer agents' (RTA) end."
Investors would not be charged any fee for using the platform. Initially, the facility will be available free for distributors as well.
Rajesh Krishnamoorthy, managing director, iFast Financial India, says, "The new entity would bring about standardisation and streamlining of mutual fund transaction processes."