NSE started offering membership of this new platform to distributors in December 2013.
Distributors can start using National Stock Exchange’s new platform called ‘MF Simplified’ from mid-June.
This is the second platform being designed especially for IFAs. Its old platform ‘Mutual Fund Service System (MFSS)’ will continue to function. Brokers will also have an option to use MF Simplified platform.
So far, mutual fund distributors did not have direct access to the stock exchange platforms. They had to become sub-broker with a broker to use the mutual fund stock exchange platform. The new MFSS platform with enhanced features is being designed specifically for mutual fund distributors.
To get membership on NSE’s new platform, distributors have to shell out a onetime processing fee of Rs. 2,500 along with a refundable deposit of Rs.15,000 (for individuals and others) while corporates have to pay Rs. 25,000. In addition, members have to pay an annual renewal fee of Rs. 2,000. NSE opened membership for distributors in December 2013.
In a bid to increase the penetration of mutual funds, SEBI has allowed mutual fund distributors to take up limited membership of stock exchanges.
One of the main concerns of IFAs earlier was that their clients could be poached by the broker who was privy to their client details. 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.
These issues have since been addressed. Now, distributors get direct membership on this platform and transact directly on the stock exchange platform under their own ARNs. Also, MF distributors will get commissions directly from AMCs.
