As the online trading platforms on NSE and BSE are unable to generate huge volumes, SEBI has called for a high-level meeting with bank-sponsored MFs and bank officials
Don't be surprised if the next time you walk into a bank and you are asked to open a demat account if you wish to invest in a mutual fund (MF). Market watchdog Securities and Exchange Board of India (SEBI) has called for a high-level meeting with bank-sponsored MFs and their respective retail product heads of the banks. The regulator had sent a communication to all bank-sponsored mutual funds and their respective banks on 1st June. The meeting is scheduled to be held on 7 June 2010.
According to sources, the agenda of this meeting is to chalk out a roadmap to boost mutual fund trading volumes on the Bombay Stock Exchange's (BSE) StAR MF platform and National Stock Exchange's (NSE) NEAT Mutual Fund Service System (MFSS) available on stock brokers' terminals.
The meeting will be attended by the CEOs of AMCs and the retail product heads of banks like IDBI Bank, HSBC Bank, Kotak Mahindra Bank, ICICI Bank, HDFC Bank and Axis Bank.
Among these banks, SBI Funds Management Pvt Ltd, HDFC Asset Management Company Ltd and ICICI Prudential Asset Management Co Ltd sell their units on both these platforms. Canara Robeco Mutual Fund is the only fund which is not yet listed on both the platforms. The participants will have a lot to mull over.
As Moneylife had previously reported, mutual fund volumes on these platforms are sluggish. (Read here: http://www.moneylife.in/article/8/3193.html)
Between 4 December 2009 and 31 May 2010, the BSE StAR platform has recorded 3,944 transactions worth Rs29.30 crore of net inflows while the NSE NEAT (MFSS) platform has witnessed Rs9.62 crore of net inflows from 30 November2009 till 31 May 2010. Mutual fund trading on NSE kicked off on 30 November 2009. On the first day, UTI Mutual Fund's various schemes generated over 300 transactions worth Rs78 lakh.
This was closely followed by the launch of BSE StAR platform last year on 4 December 2009. If we compare the trading volumes on the BSE StAR and NSE, BSE clearly scores over NSE.
The system of selling mutual funds through broker terminals was thought up when mutual fund sales slumped as the regulator cracked down on entry loads in August 2009. Online trading spelt less paperwork for investors but it also increased the cost of buying and selling units online as opening a demat account was compulsory. Also, it changed the nature of mutual funds from long-term investments to short-term instruments like stocks. Brokerage houses started to woo all mutual fund investors to convert their physical mutual fund investments into demat form in order to boost their revenues. Currently NSDL has more than one crore demat accounts while CDSL has around 66 lakh demat accounts as on 31 May 2010.
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only investors who can protest now openly against SEBI moves of harming retail investors can stop this man who is very tricky in words and workings
it is just trying to paralyse the MF institutions so that FII can be market's godfather-all domestic institutions are getting paralysed day by day and FII are shedding blood in the DALAL street of poor retail indian investor-
and the responsible guy to all this blood and killing is Mr Bhave
he always wants to do something beneficial to nsdl
rbi , irda, and finanace ministry are in deep sleep while the banks are selling all the products by offering, free drafts, free accident insurance and other freebees.
while the sebi's plea of conflict of interest in the case of bank sponsered mutual funds is still on (of course in cold storage after mr dave's joining), how they can be encouraged
are there amfi certified people in all the banks where mututal funds are sold(actually they are selling in one amfi code number situated at some other place/s)
what about the sebi's opinion about delaing with mutual funds in share markets, does it not require two types of knowledge one is amfi certification and other is about the knowledge of market trading, again on two counts one is nse and other is bse. in any case at least every branch, if allowed, can sell, if there is a person working in the branch with amfi certification and also possess NCFM Dealers module and BCFM dealers module exam. why and how sebi can exempt it
likho script apna apna
democracy at it' peak and any one can do what ever he wants to do
Long Live Republic
I strongly request them to go the field and meet the Zero knowledge small investors and advice the Mutual Funds.
If they get the cheque for Rs.500 or Rs.1000/- SIP or Rs.5000/- one time investment for the brokerage of 0.5% commission and later on give the service for switch, redemption, additional purchase, change of address, change of nominee or change of bank details, Stopping the SIP or get the account statement and correction in the account statement like name or bank account number which was wrongly entered the data.
No raw investor is ready to give service charge for a non-guaranteed product.
No existing investor is ready to give service charge till date he was not asked and secondly he might have had bad experience on markets post 2008 issues. If he is 2 to 3 year old investor.
Trying to eliminate of IFA's is very very very bad idea. I do not understand which retail distribution business is running without 2% to 3% margin.
Advisers are paying 10% service tax deducted at source, and paying up to 30% income tax plus cess. Coming together all taxes reaches up to 40%+
If the government is taking this much taxes, and approximate another 30% expenses will be there for IFA's. If what they are earning 70% goes, what is the net IFA is getting on 0.5% upfront and 0.5% trail.
If SEBI (father or mother) don't understand cost of living and raising inflation cost of IFA's, then who will understand their IFA's (kids)????
I request SEBI to allow 2% entry load up to Rs.50,000/- lumsum (one time) investment and up to Rs.10,000/- SIP and scrap exit load, so that if investor want to book the profit, he can and need not to wait for 1 year to save 1% and loose money if the market conditions are bad after 1year when he want to withdraw.
I request SEBI to allow IFA's to live and let IFA's to allow to create wealth for small investors....
No Entry Load, Higher ARN Fees and now seeking bank support to boost MF distribution.
This is like let a person starve from hunger, then stabb him and later realise that he will die and try to save him with some outdated glucose bottles.
MF Industry cannot survive without the role played by IFAs and till the time SEBI does not think on those lines, MF industry is bound to be headed towards disaster.
http://www.tflindia.in/2010/05/how-mutual-funds-work.html