Expediting NFO Process

On the backdrop of a reduced subscription period for new fund offers (NFOs), mutual fund registrar and transfer agent (RTA) Computer Age Management Services (CAMS) is all set to launch a service that facilitate online submission of NFO applications.

eNFO, as the service is called, promises to simplify and expedite the NFO process both for mutual fund companies and investors.

The Securities and Exchange Board of India (SEBI) reduced the NFO listing period from the earlier 30 days to 15 days. Besides, it has also brought down the period for allotting units to 5 days from 30 days. Effectively, the regulator has cut down the NFO period from 60 days to 20 days. The new norms came into force from July 1, 2010.

CAMS says that the eNFO service allows collection of applications from multiple cities, where there are no official transaction points, easy registration facility for independent financial advisors (IFAs), inbuilt validation that reduces errors, online transfer of funds by investors, etc.

Kamala Radhakrishnan, general manager, business development, CAMS, told Value Research that they would launch the service by July-end. The eNFO roll-out plan is well underway and linkages with market participants have been concluded. Fund houses are being given a full demo of the service. So far the response has been good from them, she added.

G Pradeep Kumar, chief executive officer, Union KBC Asset Management Company, said with stricter NFO issue period on place, the mutual fund industry will have to leverage every possible technological means to not just stick to new norms but also increase its penetration. CAMS would be our RTA, so naturally, we are going to try eNFO service, he added. Union KBC expects to launch its first product by October this year, Pradeep said.