New Delhi: There is some good news for those
who wish to invest in mutual funds but are in two minds for
putting their hands in the product through fund managers.
The market regulator has now allowed mutual funds to be
traded on stock exchanges so that more investors can access
them and have a basket of various categories of securities to
get assured of maximum returns.
"It is a positive development and an enabling decision by
SEBI for an additional way of buying mutual fund schemes. It
will facilitate the geographical reach for mutual funds," said
Value Research Online CEO Dhirendra Kumar.
However, the effectiveness of this channel for scheme
distribution remains to be seen in the days ahead, he added.
"The Stock Exchange mechanism would also extend the
present convenience available to secondary market investors to
mutual fund investors," Securities and Exchange Board of India
has said.
The guidelines are already there for sellers of mutual
fund products. They include the agents' qualifications, the
investor redressal mechanism, stamping and also monitoring by
SEBI for appointment of intermediaries for selling mutual fund
products.
With all this, the stock brokers intending to extend the
transaction in mutual funds through stock exchange mechanism
need to comply with the requirements specified by SEBI for
passing the Association of Mutual Fund Investors (AMFI)
certification examination.
In the new system, investor grievance mechanism for stock
exchanges shall provide for investor grievance handling
mechanism to the extent they relate to disputes between
brokers and their client in case of mutual funds.
The regulator has done this with an aim to use the
infrastructure of stock exchanges that already exists for the
secondary market transactions in over 1,500 towns and cities,
through over 200,000 stock exchange terminals can be used for
facilitating transactions in mutual fund schemes.
Bureau Report
First Published: Sunday, November 15, 2009, 12:10