AMCs are required to contribute Rs. 5 lakh each for setting up the platform.
Mutual fund industry’s much-awaited MF Utility platform is expected to be operational soon, said sources close to the development. Fund officials say that the platform will be first tested and will be operational by May.
Fund houses have started contributing capital for setting up this platform. As a part of this capital, each AMC is required to shell out Rs. 5 lakh to AMFI. Some fund houses have already disbursed this money to AMFI. The capital expenditure for this platform is said to be Rs. 5 crore.
AMCs have to bear the costs of running the platform depending on their respective assets under management, number of transactions, etc. It is not yet confirmed whether distributors and investors will be charged for using this platform although the widespread expectation is that it will be free of cost for both distributors and investors.
AMFI has already started giving presentations to distributors, explaining what they can expect from the platform. The platform will be operated under a separate company called ‘MF Utilities India Pvt Ltd’. H N Sinor and V Ramesh are the Directors of this company. The company will be operated on a ‘no profit no loss’ basis.
Chennai based software company Polaris is developing the platform.
The MF Utility will provide order routing and payment mechanisms with connectivity to RTAs, AMCs, stock exchanges, DPs, banks and centralized KYC repository.
The software will have the following in built features:
- Web based front end for distributors which will give one-view of their assets across industry, their investors' investments across asset management companies, submission of transactions either individually or in bulk, scanning of documents, and placing of service requests for distributors
- Web based front end for Investors to permit one-view of investments across the industry, submission of transactions and placing of service requests
- Web
based front end for RTAs & AMCs for information exchange, data
uploads, MIS access, data maintenance, etc.
Recently, BSE and NSE have also started providing membership to mutual fund distributors on their mutual fund platform. All these platforms operate on different models. For instance, a distributor has to operate as a sub-broker of Fundsindia and iFAST while Next Advisors, BSE and NSE just provide order routing mechanism at a subscription fee.
While some distributors have already joined BSE and NSE’s mutual fund platforms, others are waiting to see what MF Utility has to offer.
