Mumbai, Nov. 13: Mutual funds will now be able to piggyback on the stock exchanges nationwide network and market their schemes to investors through stockbrokers.
Market regulator Sebi said today interested stockbrokers could be empanelled as market intermediaries to sell units of mutual funds using the bourses infrastructure that covers 1500 towns and cities in the country through 2 lakh exchange terminals.
At present, there are several distributors of mutual funds that include brokerages. They rely on online networks but cannot use the stock exchange infrastructure.
Mutual fund circles said the implication of the Sebi move was immense as it would ensure greater transparency in these schemes.
Normally when one goes to sell a mutual fund, he gets its previous days net asset value (NAV). By using the stockbrokers terminal, he will know about the schemes performance almost on a real-time basis, an analyst said.
Sebi said several models had been debated to enhance the reach of mutual fund schemes in the country. However, the stock exchanges robust infrastructure offers the best bet.
The stock exchange mechanism would also extend the present convenience available to secondary market investors to mutual fund investors, Sebi added.
However, the regulator said brokers intending to facilitate transactions in mutual funds through the stock exchange network would have to comply with various Sebi requirements and pass the Association of Mutual Funds of India certification examination.
All such stockbrokers would then be considered as empanelled distributors with mutual funds or asset management companies.
Sebis move to harness the stock exchange infrastructure comes at a time when the mutual funds are planning to create their own online platform to market their schemes.
The MF platform is expected to be ready by March next year and it will allow market intermediaries to buy and sell mutual funds through the stock exchanges. More importantly, it will also enable the investors to trade or compare schemes online through a single window.
It couldnt be ascertained whether Sebis announcement today would impact plans for the MF online platform. Jaideep Bhattacharya, chief marketing officer of UTI Mutual Fund, who is overseeing its creation, was not available for comment.