Ever since SEBI allowed distributors to use stock exchange platforms to facilitate transactions in mutual funds on behalf of their clients, many distributors have signed up with transaction enabling platforms to grow their business. Also AMFI has launched MF Utility.
Currently, there are three such platforms for distributors– BSE StAR MF, NSE NMF II and MF Utility in the industry. Cafemutual strongly believes that you can grow your business by leveraging such transaction platforms as this will help you cut cost and save time. To help you take an informed decision, we will review these platforms in a series of articles.
In the first in this series, we review NSE NMF II platform based on the feedback received by IFAs who are using this platform.
Offerings: Almost all large AMCs have signed up with NSE NMF II. Currently, 32 AMCs which constitute of roughly 98% of industry AUM have signed up with the platform.
How it works: To execute transactions on behalf of your clients, you need to upload your client registration details along with supporting documents on NSE NMF II platform. The system will automatically open an account by generating an Individual Identification Number (IIN). IIN helps you to keep track of your clients’ portfolios and execute transactions. It takes two days to activate IIN.
Just like any other platform, NSE NMF II provides multiple modes of payment like net banking and cheque to execute transactions.
User base: Since its launch, NSE claims that it has enrolled over 1,500 distributors on its platform.
Fees and Deposits: As of now, the initial registration is free of cost. However, IFAs have to cough up Rs. 15,000 as refundable deposit. For corporates, the fees is Rs. 25,000. The platform charges an annual renewal fee of Rs. 2,000.
User interface: The user interface of the NSE NMF II is quite ordinary and the aesthetics need to be better. Also, you will have to key in IIN of the client every time you want to check any information.
Transaction: In terms of transaction facility, NSE NMF II is currently ahead of its rivals. Apart from basic transaction facility like lumpsum investment, SIP, switch and redemption, the platform also provides access to set up STP and SWP.
Unique factor: IFAs can create multiple accounts under their accounts for their team members based on EUIN. This helps IFAs track the performance of their team members.
Other features: NSE NMF II provides Application Program Interface (API) through which you can link this transaction facility to your website. Simply put, it will enable your clients to do transactions on their own through your website.
Also, IFAs can do E-KYC and update FATCA status on this platform on a real-time basis.
In the pipeline: NSE NMFII is ready with its mobile application which will allow you to execute transactions on behalf of your clients through a smart phone. NSE is also working on enabling transactions in Sovereign Gold Bonds through NSE MF II.
Upgrade: Currently, clients can only link one account with their IIN account. A NSE spokesperson said that they will soon allow its users to link two accounts with their IIN.
What needs to improve: The platform lacks a robust Client Relationship Management (CRM) system which plays a key role in the success of any platform.
Coming up soon are reviews of BSE StAR MF and MFU.
Note: Through this fintech review, we do not endorse any particular platform. The idea is to analyze the pros and cons of these platforms so that you can take an informed decision.
If we have missed out on something let us know about it in the comment section below.
