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News from SEBI- 

“In a circular issued on Monday, 26^th July 2021, SEBI proposed a common platform for non-financial transactions, and at a later stage, for purchase and redemption of mutual fund units”

Let us know the whole story!

What’s The Story About? 

The story is about the new circular passed by the regulator on Monday 26^th July 2021. Security Exchange Board Of India (SEBI), asked registrar and transfer agents (RTA) to jointly develop a common platform for serving existing and future mutual fund investors, purposely meant for both transaction and service requests.

As per the SEBI circular, both the RTA (Registrar and Transfer Agents) platforms, KFintech and CAMS, will be working jointly to develop this common platform for all mutual fund services. Also, it asked all the asset management companies (AMCs) and depositories to facilitate the RTAs for the development of the proposed platform.

Basically, the AMC’s have to provide data through Application Programming Interface (API) on a real-time basis to the RTA platforms and also share their respective data feeds between themselves for the generation of investment-related reports.

How Will The Common Platform Work? 

As said by the CEO of KFIN technologies, Mr. Sreekanth Nadella, the making and working of the common platform is conceptualized into three distinct phases that are planned to go live by the end of this year.

In the first phase that will probably start by December 31, 2021, the common platform will be structured to do all types of non-financial transactions.

In the second phase, it may look towards providing transaction services in mutual funds, to the distributors, registered investment advisors, AMCs, stock exchange platforms, and digital platforms. The prominent focus will be on the launch of the mobility platform as per expert.  

In the third phase, the platform will cover commercial transactions and integration with ecosystem partners for several value-added services.

How Is This Common Platform Helpful To Investors? 

Currently, there are several ways through which investors participate or invest in mutual fund schemes, like through the websites of the fund houses, MF Utilities, distributors such as banks or fintech companies.

However, the common platform proposed by SEBI will let investors get all solutions related to mutual fund investments at a single place in an integrated manner, what the platform will not provide is, investment advice only.

As per the experts, the common platform for all mutual fund transactions will simply invest in mutual funds more hassle-free for investors. With this common platform available to investors, they would not need to reach RTA’s further for their investment and redemption needs or any kind of non-financial transactions.  

Why This Common Platform Is Proposed By SEBI? 

The prominent motive behind the introduction of a common platform for all transactions and services in mutual funds is to simply the mutual fund investment for existing and future investors.

Through this common platform, the AMC’s, RTA’s, and depositories will have to coordinate the processes related to mutual funds to provide a single-window, integrated, simplified investment and service experience for the investors.

Keep reading our article and stay updated with the latest news about Mutual Funds!

For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).