Investors now have to pay Rs. SEBI approves for direct investment through stock exchanges in funds

Mumbai, Ta. 27 February 2020, Thursday

Investors will soon be able to invest in mutual funds directly through stock markets. Investors will no longer need the help of their distributors or Registered Investment Advisors (RIAs). The Securities and Exchange Board of India, the regulator of the capital markets, has asked the stock exchanges-stock exchanges to allow the purchase and sale of mutual funds directly to investors on their platforms.

With this decision of SEBI, SEBI has confirmed the competition with Mutual Fund Utility (MFU), the official platform of the mutual fund industry, introduced by mutual funds through the Association of Mutual Funds of India (Amphi) in Year 7. This allows investors to invest in mutual funds through direct plans of mutual funds with the direct use of MFUs.

BSE Star MF (BSE Ltd) and NMF to J Direct Plans offer share market platforms. But there were some limitations, in which direct plans were available on the stock markets to investors who invested in mutual funds through SEBI-registered RIAs. In the same way that investors invest in mutual funds through distributors on exchanges, the transaction was done through RIAs. Investors would then have to get a weblink from their email, which was then clicked on and paid and the transaction was completed.

In its latest decision, SEBI has made it available to investors on a platform of exchanges, which until now had their own MFUs. Zerodha, Grow and many other platforms allow investors to invest in mutual funds through Zero Fee Direct Plans. Now the question is whether investors will turn to the stock exchange platforms.

At present, the investor can invest in equity and debt funds on the same day's net asset value (NAV) for three o'clock in the afternoon. If the investor wants to invest in a liquid fund, then there is a cut-off time of 5pm, according to which the investor can invest on the previous day's NAV. An additional condition for a liquid fund is that the money must be credited to the mutual fund's account before the cut-off time.

The availability of new means of direct investment through stock exchanges and stock exchanges will enable investors to invest through the official cut-off time.