Sebi allows the direct sale of MF in bags

Mumbai: to a degree that will increase access to direct mutual fund schemes (MF), Sebi it has allowed investors to directly use the infrastructure of stock exchanges to buy and exchange units directly from asset management companies (AMC). Until now, investors who wanted to buy direct schemes (without intermediate charges) had to go to the fund's house or through a financial technology platform like Money or Zerodha.

While this move is in the direction of providing a level playing field for exchanges, we will have to wait to see how it is implemented and developed, said Pravin Jadhav, MD and CEO of Paytm Money. The dynamics of MF investment is changing rapidly with technology and, in recent months, we are already seeing investors that change even from AMC channels. Paytm Money offers a platform for direct investment in MF.

In 2013, Sebi had permitted MF distributors to use recognized stock exchanges ’infrastructure to purchase and redeem units directly from the fund or AMCs. Subsequently, in 2016, it allowed registered investment advisers to use the infrastructure of stock exchanges to purchase and redeem MFs directly.

Currently, fintech platforms, in addition to facilitating sales, also allow investors to compare the performance of the schemes and provide a large amount of information to users. It is not clear what kind of platform the stock exchanges will build for the direct distribution of MF.

“The recognized stock exchanges, clearing corporations and depositories may make necessary reforms to their existing by-laws, rules and regulations wherever required,” Sebi said in a circular issued on Wednesday.