SEBI has asked mutual fund companies and registrars and transfer agents (RTAs) to bring an integrated mutual funds transaction platform for investors. The proposed platform would be a one-stop-shop for financial and non-financial mutual fund transactions. However, investors question the need of a new platform when Mutual Fund Utility (MFU), a transaction aggregation portal already exists.
"RTAs shall implement standardized practices, system interoperability amongst themselves to jointly develop a common industry wide platform that will deliver an integrated, harmonized, elevated experience to the investors across the industry," said the Sebi Circular dated July 26.
The circular further added that the new platform will enable a user-friendly interface for investors for execution of mutual fund transactions viz. 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.
Sebi's idea, however, does not go well with most financial planners and investors, who are citing the presence of MF Utilities platform. MF Utilities was formally launched in January 2015 but most new retail investors are not aware of it. MFU is an innovative 'Shared Services' initiative by the mutual fund industry under the aegis of AMFI. The portal shows an investor's holdings across mutual funds. It allows to purchase, redeem, switch, start an SIP, request Systematic Transfer of funds (STP) of mutual fund holdings. It also allows investors to add specific goals to each scheme in an investor's portfolio. It allows to make service requests as well.
Soon after the Sebi's circular, mutual fund investors flooded the Twitter with their concerns. Former MD and CEO of MF Utility, V Ramesh, responding to a tweet said, MFU is already an official transaction platform for mutual funds. "But SEBI is not aware of it," he wrote. Here's his tweet:
Many mutual fund distributors tweeted on similar lines. One of them wrote, MF Utility is already there and is seamless. Others asked why not promote MFU instead. Here's one of the many such tweets:
Most users also seem happy with the uninterrupted and easy interface of MFU. Ganesh Ram, MD & Chief Executive Officer, MF Utilities, said, RTA Inter-operable platform is a positive move from the regulator which will benefit investors. When asked how will it be different from the MFU portal, he said, "We will be in a better position to comment once we get more clarity on what services and offering this platform will provide. At this point, it appears to be similar with inter-operable KRA services which may help investors to fetch their data from a centralised location."
Sebi's circular further mentioned that the platform may also over time, provide services to the distributors, registered investment advisors, AMCs, stock exchange and digital platforms for transacting in mutual funds to further augment ease of investing.
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