Common Platform for Mutual Funds to Improve Investor Services

Markets regulator Sebi's decision on a common platform for mutual funds will be a big step in the direction of improvement in investor services, industry insiders said on Tuesday. The platform will permit investors to place both transactions as well as service requests.

The regulator, in a circular, on Monday asked registrars and transfer agents (RTAs) to develop a common industry-wide platform for the purchase and sale of mutual funds and to handle service requests. The platform will be jointly built by RTAs.

KFin Technologies CEO Sreekanth Nadella said the interoperable solution is conceptualised to go live in three distinct phases, all of which are planned to go live by the end of this calendar year. The first phase covers non-commercial transactions (service requests of investors), financial portfolio, and CAS, among other features, even as Phase-II will see the launch of the mobility platform, he said.

"The last phase covers commercial transactions and integration with ecosystem partners for several value-added services.

"Phase-I is progressing at a brisk pace with a sizeable quantum of work completed. The platforms sustenance could come from marketing space for the participants, integration with ecosystem among others," he added.

Groww co-founder and Chief Operating Officer Harsh Jain said the move will allow a much smoother experience for all, including investors. "It has the potential to improve and elevate everyone's mutual fund experience like how UPI changed the payments domain," he said.

MyWealthGrowth.com co-founder Harshad Chetanwala said the proposed platform will help the investors, particularly on service-related transactions. Having said that portal like MF Utility (MFU) is already available for the investors to invest through their platform in most of the asset management companies (AMCs). So, this will be another platform initiated by RTAs.

"There have been many occasions for online investors where they have to reach out to every AMC or RTA to update their details. These kinds of requests can now be taken care of through this portal as investors may have to just initiate one transaction," he said. At the same time, investors will save a lot of their time as and when it's developed.

From a digital platform perspective, Chetanwala said most of the digital platform players have tied up with either BSE, NSE, or MFU to offer all the products. This initiative will become another potential partner as and when the RTAs come up with their platforms and start offering to the digital players.

Quantum Mutual Fund MD and CEO Jimmy Patel said that instead of submitting documents at multiple AMCs, an investor can now submit the documents in one place. All infrastructure, entities, guidelines about data security need to be followed.

A spokesperson of stock exchange BSE said Sebi's efforts to standardise messaging and services will go a long way in making all MF services to all distributors including the ones coming through stock exchanges and other platforms, which is currently not possible.

According to Sebi, the platform will, in phases, enable a user-friendly interface for investors for the execution of mutual fund transactions -- purchase, redemption, switch; initiation and tracking of service requests; change of e-mail ID, contact number, and bank account details; and initiation and tracking of queries and complaints.

Also, it will help investors access investment-related reports like mutual fund holdings (both in Demat and standard statement of account), transactions reports; capital gains or loss reports, details of unclaimed dividend or redemption, among others.

Through this platform, investors will be able to access these services for all mutual funds in an integrated manner. "RTAs shall make the aforesaid platform operational in a phased manner (starting with non-financial transactions) and shall be fully operational by December 31, 2021," Sebi noted.