Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Personal Finance

A Mutual Fund Trading Platform

ET: Mutual Fund trading platform takes shape

The Association of Mutual Funds in India (Amfi) has shortlisted four entities to develop a common electronic platform that will allow asset managers, investors and distributors to trade, switch over and compare schemes online through a single window.

The Amfi is likely to zero in on one entity within two weeks, following which the plan will be presented to market regulator Securities and Exchanges of India (Sebi) for final approval. Amfi intends to implement the platform by March 2010.

The need for a shared online platform for the local MF industry, a concept that has been borrowed from the developed markets, has strengthened, especially after Sebi recently scrapped the entry-load system and imposed restrictions on the industry, while doling out commissions to brokers.

SEBI bans entry loads, and suddenly they all get together to build technology that supports easy trading. This is great stuff; the ability to do this online will dramatically decrease cost of acquisition and transactions. MF agents are in trouble though – most will choose to become insurance advisors. After all, Insurance Advisors seem to keep 40-50% commissions on their client ULIP buys – IRDA, are you listening?

  • Deepak says:

    >I think the problem is to justify and show value addition complexity has been introduced in all these processes. Insurance more so with random exclusions, legalese which even a trained guy like me finds hard to understand and make sense of. I don't think IRDA will do anything like this. AMFI itself was a progressive step in the industry where atleast some sense of self regulation was a premise to start with, insurance industry still needs to come clean on many counts – denial of claims on frivolous reasons, look at the mess in health insurance….long long way to go….

  • Bingo says:

    >IRDA just listened: http://www.business-standard.com/india/news/regulator-caps-ulip-charges/364632 ! Though insurers might find loopholes in the guidelines.

  • Ak says:

    >Deepak,

    This one is off-topic, NSE publishes PE data on daily basis. I understand the earnings is the last 4 quarters trailing earnings. How upto-date is this data e.g would the July 24th data factored in reliance's earnings or is there some kind of lag/cut-off date to be considered?

    Thanks,
    Ananth

  • Deepak Shenoy says:

    >Should be done by end of day or next day – reliance results came after market close so it would have reflected only on Jul 25. But honestly, not sure.

  • Mutual Funds says:

    >It's a good news! Well the implementation is another part of it.

  • saurabh says:

    >MF industry is undergoing evolution stage, whatever change is incorporated market has to evolve accordingly.

    Saurabh