After BSE launched its overnight liquid fund product last month, NSE has introduced a similar facility on its Mutual Fund Service System (MFSS) web based platform from today. However, this facility is only available to the NSE members/brokers.
Currently only Kotak Liquid – Growth Option is available for such trades. The exchange will facilitate liquid schemes of other fund houses soon.
The new facility will allow investors to place purchase and redemption orders simultaneously in liquid schemes in physical mode. Separate order entry window will be available on MFSS, said NSE in a circular. The trades will be settled on T+1 basis.
Typically, institutional investors like corporates and HNIs carry out such transactions through offline mode. However, they are required to have a folio with the respective fund house and do a lot of documentation. This facility aims to help investors by reducing turnaround time and providing ease of transaction.
NSE members can place an order request to buy units of liquid funds on behalf of their clients till 1 pm to get historical NAV and sell it before 3 pm on the same day to earn one day’s interest. For instance, if an investor invests Rs.1 lakh in a liquid fund delivering CAGR of 9%, she can earn Rs. 25 in a day by executing overnight transaction through the platform.
The exchange may extend this facility to NSE Mutual Fund (NMF) II platform in future. NMF II is a limited membership platform for mutual fund distributors.
