Markets regulator Sebi today allowed investment advisors to use the infrastructure of the stock exchanges for sale and purchase of mutual fund units, a move that will broaden the reach of the platform.
They can utilise the exchanges' infrastructure for purchase and sale of mutual fund units directly from asset management companies on behalf of their clients, the capital markets watchdog said in a circular.
The Securities and Exchange Board of India (Sebi), in October 2013, had permitted mutual fund distributors to transact in MF units using the stock exchange mechanism.
Prior to that, only brokers were allowed to utilise the exchange mechanism for the redeeming and purchasing of mutual fund units.
"In order to broad base the reach of this platform, it has been decided to allow Sebi Registered Investment Advisors (RIAs) to use infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units directly from Mutual Fund/Assets Management Companies on behalf of their clients, including direct plans," Sebi said.
The move was aimed at allowing investment advisors to leverage the stock exchange platforms to expand their reach.
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