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Tuesday, September 29, 2009

Common platform for MFs likely by March

The much-awaited common platform for mutual fund investors to provide easy access to them as well as to distributors, reduce costs and improve efficiency will be kicked off in March 2010 and the dummy run for this is expected to start by early January 2010.

This platform is expected to eventually change the way funds are sold in India. AP Kurian, chairman of the Association of Mutual Funds in India (Amfi), said, "The advisory committee of the Amfi will take a decision on the common platform in the next four-five weeks. We have received bids from four companies."

Officials close to the development said that of the 15 companies that had placed bids the advisory committee has shortlisted, CAMS, Karvy, NSDL and CDSL, of which one will be selected to manage the platform. "Everything will be finalised once the committee meets and gives its final recommendation. By January 2010 we will start the dummy run and seek responses from market players. Once that falls in place the platform will start operating from March next year," said a member of the advisory committee.

Once the platform starts functioning, investors will have to register with a designated agency that will provide them with an identification number. Through this, investors can log on to a website, transact and access information regarding overall value of their investment in mutual funds.

"Investors will be able to access all the information under one roof and this will reduce paperwork for the distributors. The transactions by investors will be faster and this will provide a wider reach to investors," added Kurian.

After this platform starts, investors would receive an online common account statement, which will have details of all their investments in mutual funds. Market regulator, Securities and Exchange Board of India has, from the August 1, banned entry load and later announced parity among all classes of investors in charging the exit load.

According to Jaideep Bhattacharya, chief marketing officer, UTI Mutual Fund, and a member of Amfi's advisory committee, "When this platform starts, it will be useful for new investors to invest in mutual funds as the procedure will be simple. It will also have a common application form for different mutual fund schemes."

source: Indian Express

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