Mutual fund is one of the most convenient ways for investors to gain exposure across various securities and asset classes. You can choose to invest online or offline depending on your preference. However, the online mode is far more convenient–you can transact at any time and track the performance of your schemes whenever you want.
In order to make it more convenient for existing and future investors to transact and avail services SEBI has asked mutual fund Registrar and Transfer Agents (RTAs) to develop a user-friendly platform. It will be a common industry-wide platform that will aim to deliver an integrated, harmonized, and elevated experience to the investors across the industry.
The platform will, inter-alia in phases, enable users to execute the following:
- Mutual fund transactions–Purchase, Redemption, Switch, etc.
- Initiation and tracking of services requests–Change of e-mail ID, contact number, bank account details, etc.
- Initiation and tracking of queries and complaints
- Access investment-related reports such as 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.
Asset Management Companies (AMCs) and depositories will facilitate RTAs by providing data via APIs on a real time basis to the platform. Additionally, RTAs and Depositories will share their respective data feeds between themselves for generating investment-related reports.
Over time, the platform may also provide services to the distributors, registered investment advisors, AMCs, Stock Exchange platforms and digital platforms for transacting in mutual funds. This will further enhance investors’ experience in investing and putting in service requests.
Further, to ensure secured transaction on the platform, the RTAs will be responsible for complying with the Cyber Security and Cyber Resilience framework specified by SEBI. Additionally, the RTAs will ensure that the platform complies with the guidelines for Business Continuity Plan (BCP) and Disaster Recovery (DR) specified by SEBI.
The platform will be operational in a phase manner (starting with non-financial transactions) and will be fully operational by December 31, 2021.
What are mutual fund RTAs?
Registrar & Transfer Agents (RTAs) are responsible for maintaining the record of investors and the units that they hold. The functions of the RTA include:
- Processing of all purchase and redemption transactions of the investor.
- Managing the financial transactions of receiving funds for purchases and making payments for redemptions.
- Updating the unit capital of the scheme to reflect these transactions.
- Updating the information in the individual records of the investor called folios.
- Keeping the investor updated about the status of their investment account and information related to the investment.
Computer Age Management Services Ltd. (CAMS) and KFin Technologies Pvt. Ltd. (KFintech) are the leading RTAs in India. Aditya Birla SL Mutual Fund, DSP Mutual Fund, HDFC Mutual Fund, ICICI Pru Mutual Fund, Kotak Mutual Fund, PPFAS Mutual Fund are some of the mutual fund serviced by CAMS. On the other hand, Axis Mutual Fund, Mirae Asset Mutual Fund, Canara Robeco Mutual Fund, BNP Paribas Mutual Fund, Invesco Mutual Fund, are some of the mutual fund serviced by KFintech.
How will the platform benefit investors?
There are various platforms available that enable you to undertake purchases and sale transaction across fund houses. However, investors often face inconvenience when making non-financial transactions.
For instance, say you have invested in five mutual fund schemes. Now if you wish to change bank account details for purchase and sale transactions, you will have to submit the relevant documents along with cancelled cheque to each of the fund house individually.
Similarly, if you want to update your registered mobile number and/or e-mail ID, you will have to send separate requests to CAMS and KFintech.
The common platform will facilitate all transactions and service requests through a single process which will significantly reduce the turnaround time.
So the common platform can be a great move for both financial and non-financial transaction. It would greatly reduce the investors’ time, effort, and paperwork. As an investor, you will be able to make all your transactions in one place. Further, you will have access to all reports of your holding, transaction history, fund performance, statement of capital gains, etc. across fund houses at a single window platform.
Moreover, enhanced user experience can help in better penetration and growth of mutual fund industry.
This article first appeared on PersonalFN here