BSE has started giving membership to mutual fund distributors to access its ‘BSE StAR Mutual Fund Platform’. It may be recalled that SEBI, through its circular issued on October 4, has allowed mutual fund distributors to use stock exchange’s infrastructure for buying and selling mutual funds.
Distributors need to have a minimum paid up capital of Rs. 1 lakh to register with BSE. BSE is charging a lifetime membership fee of Rs. 15000. There will be no annual fees. The platform was launched in December 2009.
Around 2650 schemes of 34 AMCs are available on BSE StAR MF Platform. The number of transactions on the BSE’s platform is witnessing an increase. BSE’s StAR MF platform received an average 3.33 lakh transactions in 2013, up 44% as against Rs. 2.31 lakh transactions in 2012.
So far, access to stock exchange platform was only available to stock brokers. Mutual fund distributors had to become sub-brokers with a broker to transact in mutual funds. Hence, the commissions were received by the main broker and then passed on to sub-brokers. Now, mutual fund distributors can directly transact on the stock exchange platform under their own ARNs.
Mutual fund advisors seem to be eager to get stock exchange membership due to the convenience it will offer to them and their clients.
“I’m keen to become a member of the exchange as it will provide us ease of transaction and convenience. It will reduce paperwork,” says Vinod Jain, Principal Advisor, Jain Investment.
M S Shabbir of SenSage Financial Services is also in the process of registering with BSE. “The stock exchange platforms did not take off in a big way as brokers were less interested in selling mutual funds. Getting stock exchange membership will allow us to retain our identity unlike earlier when we had to become a sub-broker at a depository to transact in mutual funds on exchanges. It will offer great convenience to us,” said Shabbir.
Apart from BSE, NSE also has a similar platform called ‘NEAT Mutual Fund Service System (MFSS)’ which was launched in November 2009. It is not known when NSE will open registrations for mutual fund distributors.
