AMFI's online platform launch delayed again

Category: Financial Services,  News Source: The Hindu Business Line,  Updated-On: Feb 15 2012



The launch of AMFI's online mutual fund transaction platform – MF Utility – has been delayed once again. Though the launch was scheduled for April this year, it will now happen only in the second half of this calendar year.

“It would take the platform around 3-4 months to go on the floor, after vendor contracts have been awarded,” said Mr V. Ramesh, Deputy Chief Executive, AMFI.

AMFI is yet to select a vendor and this is delaying the launch, said Mr Ramesh. Currently, AMFI is on the look-out for vendors for developing the platform.

Meanwhile, mutual fund industry insiders said that AMFI had already short-listed nine entities, including some big IT firms, for this purpose.

Once implemented, the platform will provide ease of transacting for the investor and increase the reach of fund houses. It will facilitate a single transaction window for investors, who will have access to all fund houses and all their schemes through this platform.

“Investors will now have a single login ID instead of multiple, providing unified access to all AMCs. Any investor may now access any scheme online either directly or through a distributor (who would fill up the form on behalf of the investor and process it further through the registrar and transfer agent).

This becomes possible as all fund houses and distributors will also be connected to the platform,” said Mr Ramesh.

With this, investors now have the flexibility of having a single account number for all mutual funds investments. They can invest in various schemes through a single cheque and will receive a single account statement.

Analysts tracking the MF industry said that distributors would continue to play an important role in bringing in more investors through the platform as online transactions constitute less than 10 per cent of the total number.

The workflow continues to be the same for those in the trade and the changes will benefit the investor as he would have a unified view of his MF portfolio.

“This is a simple order-routing platform that will perform all activities such as allotment, payment and redemption,” said Mr Ramesh.

Though AMFI maintains that the platform is for those who are informed, have an MF portfolio and are only looking for a means of transacting, industry analysts said that investors will miss out on distributor advisory if they transact online.

“On this platform, all investors would be able to do is transact online,” said a MF distributor. “And coming from an industry body, the platform is compelled to be fund house-neutral which means investors would never be able to choose the best fund for themselves.”

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