MF Utility will help distributors save their cost and make transaction submission faster.
The much awaited MF Utility (MFU) is likely to be launched by March 2015 after the project received SEBI approval. Here’s what you can expect from MFU.
How will MF Utility help distributors?
MF Utility will help distributors at multiple levels. Firstly, they don’t have to physically rush to R&T’s office to submit applications. They can simply scan and send the applications to R&Ts and the NAV will be allotted on the same day as the transactions will be electronically time stamped. The physical documents can be sent later through courier.
Another major benefit will be that all R&Ts will be AMC neutral once MFU is fully functional, which means that Karvy can accept HDFC applications even though Karvy is not HDFC MF’s R&T. Distributors can send documents through courier to their nearest R&T.
So, if today a distributor gets 50 applications, he has to spend a lot of time in segregating them R&Twise and then ensuring that the 50 applications reach offices of the respective R&T before the cut off time. Now, with the help of MF Utility, they can simply scan and send the documents to MFU. This will help distributors scale up and execute more transactions everyday.
Since distributors only have to fill up client details only once, which will be electronically submitted to MFU, the data entry errors at R&T level will come down. This will minimize discrepancies in account statements.
How will it benefit your client?
Suppose your client wants to invest Rs. 50,000 in five different schemes. Your client has to fill up five different transaction slips/application forms and give five separate cheques. Through MF Utility, your client can invest with a single cheque of Rs. 50,000. This cheque has to be drawn in favour of ‘MF Utility’. You clients’ money will go to an escrow account and then disbursed to the concerned AMCs.
Moreover, your clients will not have to fill up five different application forms of fund houses. MF Utility will have a common form which can be used to invest across schemes of different fund houses.
Is your client data confidential?
Your client data will be kept by MF Utility for a period of three months. Besides, MFU infrastructure has multi-layered security features which are thoroughly tested through independent security testing agencies.
Will there be any cost for distributors and investors?
No, MF Utility (MFU) can be accessed by distributors and investors free of cost. MF Utility will be launched in two phases – first phase for distributors and second phase for investors.
How many AMCs are part of MF Utility?
As of now, 25 AMCs (including the top 10 AMCs) have signed up with MF Utility.
What infrastructure do you need to use MF Utility?
All you need is internet connectivity, printer and a scanner in order to send documents to MFU.
How many distributors have enrolled for MF Utility so far?
So far, 2,400 distributors including 280 corporate distributors have enrolled for MF Utility.
Is MF Utility a competition to existing players?
No. MFU merely acts as a transaction aggregation portal which will accept and forward the transactions to the respective AMC/RTA. The system is designed keeping in mind to help the entire ecosystem of mutual fund industry. Unlike online platforms which provide support system to distributors like research, scheme recommendation, sales support, etc., MF Utility is just a system for submitting transactions.
What information will MF Utility provide on its website?
The system will provide access to online common account statement, composite portfolio information, portfolio holding and scheme related information. It also offers industry level value added services like alerts, triggers, reminders etc., allowing investors to monitor and manage their investments more effectively. Distributors will get industry MIS reports from the system.
Will there be a log in id to use the system?
Yes, distributors will be given a log in id to use this system.
MF Utility will allot a common account number (CAN) for each investor. There will be only one CAN alloted to each investor. The CAN will be mapped with the PAN of an investor.
Over time, this will give the industry a more accurate fix on the actual investor count. As of now, investors tend to hold multiple folios. Hence, the total number of folios is not a real indication of the number of MF investors as each investors tends to hold multiple folios.
How will the existing folios/investments be migrated/linked to MF Utility?
MF Utility will not migrate the existing investments of the investors. However, upon creation of a CAN, MFU will map the existing folios of the investor/s across mutual funds, to the CAN, based on the PAN and the holding pattern.
Can distributors create multiple user ids on MFU?
Yes,
distributors can create multiple User IDs for their employees who will in turn
access MFU portal to input "requests" received by them at their offices.
However, it will be subject to certain terms and conditions.
Will MF Utility provide a facility
for distributors to link their existing online transaction portals?
Yes, MFU will facilitate distributors already
having “online transaction submission” capabilities to integrate their portal
to MFU portal.
How to register with MF Utility?
Distributors have to fill up a form and submit it to MF Utility. Click here to download the form.
