Brokerage houses may not get any transaction fee for any investments made through Star and MFSS platforms
Mumbai: Mutual Fund houses seem to be reluctant to allow brokerage houses to deduct Rs 100/150 transaction charges from their investors. Their argument is that brokerage houses are already deducting brokerage costs from mutual fund investors on the buy and sell side.
Brokers currently get trail and upfront commission for selling mutual funds in addition to the brokerage.
“Brokers are putting orders on behalf of their customers and they are already collecting money from investors. We want to exclude that segment of distributors from transaction charges,” said a top official of a leading fund house.
SEBI facilitated buying of mutual funds through the stock exchanges with the launch of BSE StAR MF platform and NSE Mutual Fund Service System (MFSS) in 2009 to penetrate mutual funds in India. However these platforms have not been generating substantial volumes due to lack of broker interest in selling mutual funds.
“Brokers don’t actively sell mutual funds. The business from brokers is less,” said a sales head of a leading fund house.
The exchanges meanwhile are interested in getting the transaction fee.
“Brokers are already charging for buying and selling of mutual funds,” said a chief operations officer of a bank sponsored mutual fund.
