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| More Mutual Funds line up to trade on NSE |
| BS Reporter / Mumbai Dec 01, 2009, 21:20 IST |
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No clarity yet on brokerage fee, securities transation tax yet.
At least 10 domestic mutual funds (MFs) would list their schemes within a week on the National Stock Exchange’s (NSE’s) Mutual Fund Services Platform, which was launched on Monday.
UTI became the first MF to list its scheme, which got more than 300 applications worth around Rs 75 lakh.
The platform will enable investors with demat accounts to buy MF units on the exchange. UTI Asset Management Company Chairman and Managing Director, UK Sinha, said, “The tie-up will be an additional facility provided to investors and will work along with the existing distribution network.”
NSE has over 200,000 trading terminals spread across 1,500 towns and cities.
Securities and Exchange Board of India Chairman CB Bhave said, “The platform will benefit investors in a major way. Other stock exchanges and depository participants will launch the platform soon.”
Transactions on the platform will be processed on the same business day on which the investor’s funds are credited to the MF’s bank account. Investors also have the added advantage of obtaining the same day’s net asset value (before 3 pm).
In addition to online subscription and redemption, investors may apply for new fund offers and additional subscriptions. The facility will also enable switching of units.
No entry load will be charged for applications not routed through a broker or distributor but forwarded to MF houses online. There is no clarity on levy of brokerage and securities transaction tax. NSE officials declined comment on this.
NewsWire18 adds:
However, NSE would not levy any fee on mutual fund transactions through brokers on its online platform for a few months, Managing Director Ravi Narain said on Monday.
India’s largest bourse also plans to offer systematic investment plans and liquid schemes on the platform, Narain said. Participants will be able to access the system from 9 am to 3 pm.
Meanwhile, five mutual funds, Birla Sun Life Mutual, ICICI Prudential Mutual, Fidelity Mutual, Reliance Mutual, and Tata Mutual, were in talks with NSE and NSDL for trading schemes on the platform, said NSDL Managing Director and Chief Executive Officer Gagan Rai.
NSDL, the only depositary participant roped in by NSE for its platform, would waive all depositary charges for the first few months, Rai said.
“We are still in the process of working out. But I can assure you that charges (after the first few months) will be much less than the normal depositary charges,” he said.
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