Finance News

MFs could get a single sale, trading platform

Mutual fund investors may never have it so convenient. Rather than spend hours with distributors or pore over various offer documents to choose their schemes, investors may soon have a one-stop platform where they can select—and even trade—mutual fund units.

A committee under the Association of Mutual Funds in India (Amfi) is working on the concept which, once it is given final shape, could change the very way investors deal in mutual funds. This comes at a time when Securities & Exchange Board of India (Sebi) chairman CB Bhave has suggested that, like equities, mutual fund investors could also have a common statement on all their unit holdings, just like the system that exists for equity investors through depositories.

Confirming the move on a common mutual fund platform, Amfi chairman AP Kurian told FE: "We have set up a committee to work on this. Investors should be able to buy and sell mutual fund units across schemes, with ease, from home. The idea is to facilitate that through a single platform. Its feasibility and logistics are being worked out. Currently, the Internet is used for single-fund houses. This kind of platform can bring more than one fund house together."

What this implies is simple: as in the case of an equity trading portal, a mutual fund investor could access this common platform and choose the scheme that he wants to invest in. A trading facility could also be provided on this platform. Kurian said the platform would then have to be linked with participating banks and mutual fund houses to provide these facilities for their schemes to investors. The initiative could then be upgraded on the lines of what the Sebi chairman alluded to on Wednesday. A common statement for all funds could also eventually be possible once such a platform, with members from all fund houses, becomes a reality, Kurian added.

Amfi is also working on another important initiative, which would allow fund houses to assess their geographical reach and performance on the sales front. While Amfi currently provides monthly aggregate figures for collections and redemptions, fund houses will soon have access to product sales data across geographies, giving them meaningful information on which to build their sales networks.

"They will get to know the sales from various classes of investors and across various cities—something which is not available to them now. We will soon make that available to the fund houses," Kurian said.