Ajay, a seasoned advisor, looks back to the time when he had to rush to the registrar’s office to be able to submit his clients’ mutual funds application forms before 3 pm. All that changed when SEBI allowed stock exchanges such as NSE to provide distributors online transaction facilities in mutual funds. Ajay was among the first ones to register on the NSE platform.
However, yesterday while chatting with one of his friends he realised that apart from online transactions, the platform offered some other interesting features that he could use to grow his business.
Let us look at these functionalities briefly.
- Register multiple bank accounts of a single investor
An investor can link up to five bank accounts with his Investor Identification Number (IIN), a similar facility is existing with AMCs today for physical transactions. This facility lets the investor route the transaction from the account of his choice without having to resort to a paper cheque.
- Aadhaar based e-KYC for new investors
NMF II was the first exchange platform to allows advisors to complete e-KYC of new users online using Aadhaar. Once you login to NMF II, you can do e-KYC through Aadhaar based OTP. Currently, there is a limit of investment of up to Rs.50,000 per annum in OTP based e-KYC.. Investors with Aadhaar number and PAN can complete their KYC process using this e-KYC and open a folio without having to submit forms and doing in-person verification (IPV). You can anyways do biometric of your clients later once you onboard them as there is no aforesaid limit restriction of Rs. 50,000/- in case of Biometric e-eKYC.
- Provide client login (optional)
A distributor while registering a client can grant him the right to transact online through NSE NFM ll.This allows the client to review his investments, initiate new transactions and generate reports through the portal. This helps you cater to your clients even in geographically diverse areas. Also, this functionality facilitate investors to execute the transaction based on distributors’ advice during the most volatile days when market behaves against the rational analysis, thus encashing the opportunity for eg. Brexit event, Demonetisation or any other natural mishap
- Create asset allocation basket
You can shortlist a bouquet of funds for clients through this facility. You can also give weightage to schemes based on risk appetite of your clients. For instance, if you selected five schemes in a basket with 20% weightage to each scheme and if your client has invested Rs.1 lakh, then Rs.20,000 will be allocated to each scheme. This facility enables investment in a basket of schemes through a single transaction.
- Getting mandates become easy
Apart from KYC, another biggest challenge for the MF industry to onboard a client, who wants to start an SIP, is getting the bank mandate approved. This usually takes 2 weeks.
However, with NSE NMF II e-mandate facility, your clients will no longer be required to send a physical form along with the cancelled cheque to initiate SIP.
Through e-mandate, investors can give mandate online through Aadhaar based authentication. All they need to do is key in the OTP triggered to their mobile number registered with UIDAI.
An investor can invest up to Rs.1 lakh from an account linked in this manner. At present, only select banks facilitate e-mandate. There are 17 banks currently available for e-mandate registration.
So far, investors can register bank mandate through offline mode by filling the physical form. This process is time consuming, involves physical form filling and form submission along with necessary documentation at the respective offices.
Cafemutual would love to hear from you about your experience with any of these features and how it helped your business.
