Distributors can start accessing BSE’s revamped StAR MF platform from March 06.
In October, BSE started giving limited membership to mutual fund distributors for a fee of Rs. 15000. The platform launched in December 2009 was only open to BSE brokers earlier.
There were a number of issues which prevented IFAs from joining mutual fund platforms run by stock exchanges. High costs of becoming a broker prohibited IFAs to take up stock exchange membership.
Earlier, a mutual fund distributor had to become sub-broker with any of the broker to use StAR MF platform. One of the main concerns of IFAs was that their client details were shared with their broker. Thus, distributors feared that their clients could be poached by the broker. Now, distributors get direct membership on this platform.
Also, sub brokers had to part with their commissions with main broker. The transactions were registered under the ARN of broker. The broker would pass on the commission to sub-broker after deducting a certain percentage of commission. Now this issue has been fixed. Now, mutual fund distributors can directly transact on the stock exchange platform under their own ARNs. Distributors will get commissions directly from AMCs.
In a bid to increase the penetration of mutual funds, SEBI allowed mutual fund distributors to take up limited membership of stock exchanges.
The eligibility for taking up StAR MF membership is less onerous as compared to getting regular membership of stock exchanges. Distributors need to have a minimum paid up capital of Rs. 1 lakh to register with BSE. Around 300 distributors, including 65 IFAs, have joined the platform since the exchange started providing membership to distributors.
Around 2650 schemes of 34 AMCs are available on BSE StAR MF platform. In the first phase, the platform will allow distributors to buy and sell mutual funds. Thereafter, switch option would also be made available.
