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The competition in online distribution space is heating up.
Mukesh Ambani led Jio group has forayed into mutual fund distribution business.
Recently, AMFI has granted execution only platform (EOP) – 1 license to Jio Payment Bank on September 25, 2024.
Jio Payment Bank is like other UPI apps like BHIM, PhonePE and GPay. However, it allows people who don’t have smartphone to operate this app by opening their account through physical outlets.
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, there are two kinds 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.
EOPs registered with AMFI can charge for up to Rs.2 per transaction. However, these EOPs can levy a separate fee levied towards payment gateway charges. Also, AMCs can consider providing additional incentive of Rs.0.50 to new players to encourage healthy competition.
Currently, there are 15 category 1 EOPs registered with AMFI.
