UTI First on Mutual Fund Platform
Around 30 of the 100 schemes of UTI Mutual Fund will be listed on the new NSE Mutual Fund platform, which is set for a Monday launch. The liquid schemes will not be included among them, said a top UTI official.
For the fund industry, it will be a new technology-driven initiative when UTI MF lists its schemes on Monday on NSE’s new platform – the Mutual Fund Service System (MFSS).
…
The new transaction platform allows investors who have demat accounts to transact in mutual funds online by logging on to their broker’s telecom network, which will be linked to NSE’s MFSS.
Those who do not have demat accounts will have to apply to their respective mutual funds for generation of a personal identification number (PIN), a user ID and password; this route will also facilitate online transactions, without the broker coming into the picture.
Such investors will have to provide their bank account details along with their PAN and fund folio numbers to get their PIN.
Transactions would be processed on the business day on which the investor’s funds are credited to the mutual fund’s bank account. Units will be allotted at the previous day’s NAV for orders received up to 3 p.m.
The downside is that where you have no entry load, you might end up paying brokerage - which is usually 0.2 to 0.5%, substantially lower that entry loads, but still, more than directly investing.
This will allow mutual funds to get access to the smaller towns where there may be no mutual fund collection point, but brokerages have managed to get there through VSAT links.
Let’s see how it all pans out. It’s not going to be dramatically different from, perhaps, buying directly from the mutual fund, or using an online distributor; but there may be a cost.