IGI Logo

Regulation to set up RTA inter-operable investor transaction platform by RTAs for investor

The aim of the SEBI circular (Link) is to deliver an integrated, harmonised, elevated experience to investors across the asset management industry. Hence, even if the investor has folios in different mutual funds with different RTAs, it will be able to access all services like purchase, redemption, switch, etc., plus initiation and tracking of service requests in an integrated manner under a single window. However, the circular also provides enabling provision to provide services to the distributors, registered investment advisors, AMCs, stock exchange platforms, and digital platforms for transacting in mutual funds to further augment ease of investing and servicing of investors through the stated stakeholders in consultation with SEBI.

In our view, this joint platform of RTAs (more in the point of acceptance) can potentially become the primary portal for all mutual fund related businesses as one of the challenges currently facing RTAs towards such an offering was that MFs were split between the two RTAs. The backend operational work remains independent. As such, other platforms offering MF services can face competition in future.

In order to make it more convenient to the existing and future investors to transact and avail of services while invested in mutual funds and pursuant to discussions with various stakeholders including AMFI, depositories and the RTAs, the following has been decided.

* Common industry platform to enhance investor experience:

RTAs shall implement standardised practices, system interoperability amongst themselves to jointly develop a common industrywide platform that will deliver an integrated, harmonised, elevated experience to investors across the industry. AMCs and depositories shall facilitate the RTAs for development of the proposed platform.

* User-friendly platform to execute MF transactions and provide value-added services:

The aforesaid platform shall, inter alia, in phases, enable a user-friendly interface for investors for 1) execution of mutual fund transactions (viz. purchase, redemption, switch, etc.), 2) initiation and tracking of service requests (viz. change of email id / contact number / bank account details, etc.), 3) initiation and tracking of queries and complaints, access investment-related reports, viz. mutual fund holdings (both in demat and standard statement of account), and 4) transactions reports (including historic transactions), capital gains/loss report, details of unclaimed dividend/redemption, etc.

Through this platform, investors will be able to access these services for all mutual funds in an integrated manner. In this regard, AMCs, RTAs and depositories shall take necessary measures to provide data via APIs on a real time basis to the proposed platform. Additionally, RTAs and depositories shall also share their respective data feeds between themselves for generation of investment-related reports.

* Provide services to market intermediaries to provide ease of investing:

The platform may also over time, provide services to the distributors, registered investment advisors, AMCs, stock exchange platforms and digital platforms for transacting in mutual funds to further augment ease of investing and servicing of investors through the aforementioned stakeholders in consultation with SEBI.

To Read Complete Report & Disclaimer Click Here

For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412

Above views are of the author and not of the website kindly read disclaimer