Mutual fund (MF) registrar and transfer agents (RTAs) KFin Technologies Pvt Ltd (KFintech) and Computer Age Management Services (CAMS) Ltd yesterday launched an MF transaction portal called MF Central. This follows a directive in July by the Securities and Exchange Board of India (SEBI) to RTAs to come up with a common platform for MF transactions by 31st December. The much-fancied interoperable platform is, however, marred by several glitches.
Many people complained that their MF holdings (especially CAMS ones) were not visible after they logged in.
For instance, one MF investor wrote on Twitter that after clicking the links provided in MF Central portal , he was directed to ETMoney web pages. He questioned the purpose of the portal if it is directing to the other third-party websites. He even posted a video of how ETMoney pages were randomly opening on clicking menu items on the MF Central portal.
As if to add insult to injury, an official of KFin Technologies using the handle (@weKFintech) responded to him saying “Dear Sir, we wish to inform you that the hyperlink redirecting you to an article on the ET-Money Website, is to help enhance investor's knowledge and is in no way related to the services offered on the MF Central Platform. Hope this helps with your query. Have a good day!”
As of now, investors can use MF Central to see their full MF portfolio, change their email/mobile, consolidate folios, add /change nomination and correct any folio details. The first phase has been rolled out only for individuals but distributor services are expected to be enabled on the platform in later phases.
Sources said that in June 2019 there was an internal committee formed at SEBI, ironically called ‘Ease Of Doing Business’ (EODB), to look into several issues—one of which was this. The committee, which was chaired by Kailash Kulkarni, CEO of L&T Mutual Fund, had in February 2020 (just before the first lockdown started) recommended having a centralised system for MF investors (not for distributors) so that investors could put their queries, complaints, service requests, etc.
The market regulator had originally envisioned that CDSL & NSDL would roll out the common platform but both depositories are understood to have backed out by saying their area of expertise is different. SEBI then approached the RTAs to do this and the RTAs took up this project and started building the portal.
Sources indicate that the work on the portal had started in March 2020. On 21 July 2021, when SEBI came out with the circular (merely to endorse the earlier decision), work on the project (common platform by the RTAs) was almost nearing completion. As Moneylife had written in a previous article, it is actually an old idea that dates back to the tenure of former SEBI chairman UK Sinha and such a platform already exists in the form of MF Utility. Only minor tweaks would have been required to add the interoperability and missing elements.
One MF head honcho rhetorically asked “How can the RTAs finish the portal and the back-end process in just less than two months if they have started the work only in July end? This is how SEBI works. Circulars come out way later only to validate earlier oral decisions.”
This also helps explain why despite so much trolling on social media for duplicating the effort and wasting resources (after the circular was released), SEBI did not back down/ withdraw and still went ahead with the circular.
Several domain experts had earlier, in July, pointed out that the new platform is sheer duplication and is just not required
. They had also highlighted how the existing MF Utility (MFU) platform could have been used (by adding the missing 5% elements) and enabling a scalable tech solution to bring convenience to all stakeholders, including investors.
The platform is conceptualised to go live in three distinct phases, all of which are planned to go live by the end of this calendar year. The first phase, that has gone live yesterday, covers non-commercial transactions (service requests of investors), financial portfolio view, and consolidated account statement amongst other features. The next two phases will see the launch of a mobile app, financial transactions, and integration with ecosystem partners for several value-added services.
Anuj Kumar, managing director, CAMS commented, "We are pleased to bring the MF Central platform to the investor community. The platform will bring about simplification in mutual funds services and reduce turnaround times, while providing safe access. Leveraging the power of digital, MF Central provides a unified gateway for friction-less services across all mutual funds".
MF Central will offer services for all your mutual fund folios having the same permanent account number (PAN) and registered mobile number. Portfolio coverage is across folios in demat or non-demat forms. However, service requests are currently restricted to only your non-demat holdings that are originated from MF Central.
Investors can use their PAN details and their mobile number that is registered with their MF investments to register on MF Central. It will then carry an OTP-based authentication for registering you as an authorised user.
MF Central offers digital access to investors with the entire MF industry under one roof without needing them to open a new account.
The new platform expects to transform investor experience with the MF industry through its single-window view across all mutual funds. The move is expected to help investors who will be able to get a consolidated statement of their MF holdings and transactions. They will also be able to give service requests through the platform.
The common platform will enable clients to execute financial and non-financial transactions. To start with, the platform would facilitate non-financial transactions such as downloading account statement, updating email id and phone number, changing address and bank details and so on across all fund houses.
In the second phase, which would become operational by 31 December 2021, the platform will offer financial transactions like investment, redemption and across all fund houses.
Currently, there is MF Utility (MFU), which is also an initiative by the MF industry under the aegis of the Association of Mutual Funds in India (AMFI), which the participating mutual fund companies equally own.
In MFU one needs to create a common account number (CAN) for transacting across MF schemes using a single form. The platform currently has a turnover of close to Rs10,000 crore to Rs15,000 crore every day.