NSE's MF push to get FinNet edge post CAMS stake buy

Platform provides online transaction services to distributors

The National Stock Exchange’s acquisition of a 45 per cent stake in Computer Age Management Services (CAMS) is also likely to help the exchange increase its footprint in the mutual fund transaction and distribution space.

It will help the exchange add an online service dimension to its existing distribution platform through the exchange mechanism.

The acquisition gives the exchange an indirect hold on FinNet, an internet-based transaction platform for mutual funds. The platform has been developed in partnership between CAMS and Karvy, which accounts for almost 95 per cent of the mutual fund transactions in the country, according to its website.

NSE ADDS TO MF ARSENAL

• NSE currently provides an exchange platform for MF transactions
• FinNet is a separate online portal designed to ease transactions for distributors
• Provides window to for easier completion of forms and sending of the same to registrars
• CAMS developed the platform in partnership with Karvy
• NSE’s acquisition of CAMS stake gives it an indirect hold on the platform
• It increases the range of services NSE can provide to MF distributors

This is likely to augment the exchange’s existing presence as a platform for mutual fund transactions. It currently runs the mutual fund service system, which allows investors to buy and sell mutual fund units through the exchange platform via its broker network.

“CAMS presence in the mutual fund space will help in the expansion of the mutual fund platform,” an exchange spokesperson had said at the time of the announcement.

This is not the only move it has made to reach out to distributors. Earlier in the month, the NSE had allowed mutual fund distributors to become direct members of the exchange for the purpose of MF transactions.  Previously, the exchange’s mutual fund platform was only open to its existing network of stock brokers.

“NSE has now proposed to offer limited purpose membership to all the mutual fund distributors to use the exchange infrastructure to purchase and redeem mutual fund units on behalf of their clients,” said the circular dated December 19.

The online FinNet platform too has primarily been designed to aid the distribution community, according to its website.

“This internet-based platform is primarily aimed at cutting the geographical and communication barriers to aid the distributors to optimise the time and effort involved in acquiring, advising and servicing the clientele,” it said.

CAMS is one of the largest players in the registrar and transfer agent business for mutual funds, and provides services to 17 mutual funds, including HDFC, DSP BlackRock and Birla Sun Life.