The way mutual funds are sold in India is set for yet another transformational change. This time the change is going to be in the way funds are sold.
Mutual fund investors are close to getting a common investment platform that will make the task much easier for them as well as distributors. While the date for its implementation has been set for sometimes in March, the dummy run is slated to start from January, 2010, after which market participants’ views will be taken to fine-tune any glitches.
After the system is up and running it would be beneficial for investors to transact all their investment deals through it as the procedure will be simple, even having a common application form.
Bids had been called for by the Association of Mutual Funds in India (AMFI) to select companies that would manage the platform. Four have been shortlisted from a list of 15 that had submitted their bids, including CAMS, Karvy, NSDL and CDSL, according to the Financial Express.
The final recommendation is expected from an advisory committee of the AMFI in four-to-five weeks, said AMFI Chairman AP Kurian.
Once the system is running investors will have to register with a designated agency to get a registration number, which will have to be quoted to allow access to the website in order to invest, source information or transact any other business.
All user information will be available at one place, making for a comprehensive understanding of the current investment situation for the individual for a precise decision-making possibility. Investors will also get a common account statement too as a result of this platform.
For the distributors, this will cut the copious amount of paperwork that is currently required and make each transaction faster and smoother to complete.