Systems in place to facilitate 'Chhoti SIPs', says KFin Technologies

However, enrolments remain low at just about 2,000

KFin Technologies and CAMS, the two registrar and transfer agents (RTAs) of domestic mutual funds (MFs), have said that they are equipped to identify systematic investment plan (SIP) accounts that qualify as 'Chhoti SIPs'.

 

However, according to the data shared by the RTAs, the initiative has seen limited response with just about 2,000 registrations. While CAMS said it has identified around 1,800 such SIPs, KFin says it has witnessed over 150 registrations.

 

The RTAs' comments on readiness comes after the Association of Mutual Funds of India's (Amfi's) recent remarks that technical issues have led to slower off-take of the Rs 250-SIPs. 

 

The key hurdle, according to Amfi chief Venkat N Chalasani, was identification of such SIPs, which falls under the domain of RTAs. 

The regulator, along with industry stakeholders, had designed a subsidised cost structure for small-sized SIPs to make them viable for fund houses to accept low-ticket investments. At present, several mid-sized and small fund houses do not offer such smaller SIP options.

 

However, the reduced cost is available only for the first three fund houses with which an investor registers a chhoti SIP.

 

The challenge of identifying these SIPs, according to KFin, has been made possible.

 

"RTAs will conduct preliminary validations based on the criteria outlined below, and only the eligible PANs will be sent to KYC Registration Agencies (KRAs) in batch mode to obtain the final confirmation from them about the first 3 fund houses who have consumed the KYC data from the KRAs. The decision of tagging the Chhoti SIP is purely based on the information received from the KRAs," KFin said.