Concerns remain on operational costs of running the day-to-day
operations of this platform
Mumbai: AMFI has shortlisted nine companies for developing MF
Utility platform. AMFI has sent Request for Proposal (RFP) to these nine
shortlisted players. The bidders are likely to revert to AMFI with their detailed
plans by the end of January.
bidders had told Cafemutual that it
would be difficult to design a fully functional platform in the 3-month deadline
set by AMFI. However, AMFI is yet to decide on whether it would consider
extending the deadline.
industry officials are of the view that AMCs may not want to make a huge investment
in something which is not their core function. The challenge is not only to
develop it but also run it. Running the day-to-day operations of a system like
MF Utility may even increase the headcount, and thus,costs for AMFI which is
funded by AMCs.
view point is that the MF Utility should be run as a commercial venture rather than
as a not-for-profit unit. Their argument is that a not-for-profit venture will
not assure the best services to investors. AMFI plans to charge a transaction
cost for executing orders to fund its operational expenses. The MF Utility committee
wants the venture to operate a no profit no loss basis. Their idea is to
provide this platform as a value add-on to pull in more investors into MF fold
and streamline the investment process by eliminating time, cost and money
involved in physical investing. AMFI may also explore to appoint DPs as point of
service for MF Utility. The MF Utility will be owned by AMFI.
MF Utility will provide order routing and payment mechanisms having
connectivity to RTAs, AMCs, stock exchanges, DPs,
banks, centralized KYC repository, etc.