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AMFI has capped transaction charges for execution only platforms at Rs.2 per transaction. However, execution only platforms registered with AMFI can levy a separate fee levied towards payment gateway charges.
In a FAQ, AMFI said, “The upper limit of transaction fees @Rs.2 per transaction is exclusive of payment gateway charges. payment gateway charges, if any, will be paid/reimbursed by the AMC to the EOP separately, as may be decided between the respective AMC and the EOP.”
Such a cap on transaction charge is applicable for stock exchanges like BSE Star MF and NSE NMF II. These platforms are exempted from registering with AMFI as EOP 1.
Also, AMCs can consider providing additional incentive of Rs.0.50 to new players to encourage healthy competition. AMFI clarified that EOPs cannot levy any fee other than transaction.
AMFI further said that EOPs cannot offer incidental advice. AMFI said, “EOP or any of its employees shall not render, directly or indirectly, any investment advice about any mutual fund scheme/s either on its own or in any other publicly accessible media, whether real-time or otherwise, nor make any recommendation to any investor for purchase or redemption of Units of any mutual fund scheme.”
So far, eight players have received EOP 1 license. These companies are ET Money, FI Money, Jupiter Money, KFin Technologies, MF Utility, Right Alpha Capital, Smallcase Technologies and Value Research.
Earlier, SEBI introduced two set of norms of EOPs – category 1 EOPs can become agent of AMCs and charge transaction fee from them by obtaining license from AMFI and category 2 EOPs can become representative of investors and charge them directly by taking stock broking license.
According to SEBI, EOP is any digital or online platform, which facilitates transactions such as subscription, redemption and switch transactions in direct plans of the schemes of mutual funds.
Currently, many large direct plan platforms like Coin by Zerodha and Groww do not fall under EOP framework as SEBI exempted RIAs and brokers from EOP regulations.
