Expects 7-8 Fund Houses To Join Soon Once Tech Infrastructure Is Put In Place
TRADING in units of mutual fund schemes through the exchange platform got off to a good start on Monday with over 300 transactions worth Rs 78 lakh featuring fund house UTI Asset Management Company on the National Stock Exchange (NSE).
Other fund houses, including Reliance, Prudential ICICI and Birla Asset Management Company, are in the process of creating a technology infrastructure to list their mutual fund schemes on NSE. Says Ravi Narain, MD & CEO, NSE: "You will see 7-8 fund houses joining in the next few weeks. The timing will depend on how quickly they connect their technology." Initially, NSE and its designated depository NSDL will waive all charges for trading on the new platform.
"This will make the mutual fund industry more efficient and give the same reach as the secondary market," said Sebi chairman CB Bhave while speaking at the launch of NSE's new mutual fund service system (MFSS). Going ahead, other stock exchanges and depository participants would also be launching the platform soon.
Other fund houses, including Reliance, Prudential ICICI and Birla Asset Management Company, are in the process of creating a technology infrastructure to list their mutual fund schemes on NSE. Says Ravi Narain, MD & CEO, NSE: "You will see 7-8 fund houses joining in the next few weeks. The timing will depend on how quickly they connect their technology." Initially, NSE and its designated depository NSDL will waive all charges for trading on the new platform.
"This will make the mutual fund industry more efficient and give the same reach as the secondary market," said Sebi chairman CB Bhave while speaking at the launch of NSE's new mutual fund service system (MFSS). Going ahead, other stock exchanges and depository participants would also be launching the platform soon.
Market regulator Sebi recently allowed transactions in mutual fund schemes through the stock exchange infrastructure.
Besides the existing distribution system, the new NSE platform is an additional facility provided to investors. NSE has more than 1.5 lakh terminals across 1,500 towns and cities. The arrangement with NSE will facilitate quicker settlement of transactions and provide a single window to demat holders for their investments
Terminals of NSE brokers will be the official point of acceptance and the date of acceptance of the transaction will be the date of entering the request on the terminal. Investors will also have the added advantage of obtaining the same day's NAV (before 3 p.m.). Besides, the option of getting their units allotted in demat mode in addition to the existing physical. With Sebi banning entry load charges with effect from August 1, equity schemes of many of the fund houses have been hit. The exchange platform is seen as offering an alternative to investors to either buy or sell units after distributors virtually stopped pushing such schemes.
