BSE allows MF distributors to use its infra

BSE said an entity seeking to register itself as MF Distributor on its mutual fund platform is required to have a networth of at least Rs 1 lakh

Leading stock exchange BSE today allowed MF distributors to use its infrastructure for purchase and redemption of mutual fund units directly from Assets Management Companies (AMCs) on behalf of their clients following a Sebi directive.

In a circular, BSE said an entity seeking to register itself as MF Distributor on its mutual fund platform in a move to use the exchange's infrastructure is required to have a networth of at least Rs 1 lakh on the basis of audited balance sheet of latest financial year.

For an individual, the exchange has set a minimum tangible assets worth Rs 1 lakh.

Also, the exchange would charge a one-time fee of Rs 15,000 for membership.

MF distributors would not handle payout and pay in of funds as well as units on behalf of investor.

"The pay-in will be directly received by recognised Clearing Corporation and payout will be directly made to investor's account.

"In the same manner, units shall be credited and debited directly from the demat account of the investors by the Clearing Corporation," BSE said.

Earlier this month, Sebi had cleared the proposal to allow MF distributors to use the infrastructure of recognised exchanges for purchase and redemption of mutual fund units directly from AMCs on behalf of their clients.

This would be in addition to the existing channels of MF distribution.

The move is aimed at leveraging the stock exchange platform, which would eventually help MF distributors to improve their reach.

This facility would be available only for a MF distributor registered with Amfi (Association of Mutual Funds in India) and those who have been permitted by the stock exchange concerned would be eligible for this purpose.

The stock exchange would grant permission on a request made by a Amfi registered MF distributor on the basis of criteria including fee and code of conduct, among others, as laid down by it.