The Bombay Stock Exchange (BSE) launched its online mutual fund trading platform on Friday. The platform allows BSE brokers to use the existing exchange infrastructure for transaction in mutual fund schemes. All existing mutual fund investors can also use this electronic platform.
Inaugurating the BSE Stock exchange for Allotment and Redemption for Mutual Funds (BSE STAR MF), Securities and Exchange Board of India (SEBI) chairman CB Bhave called it an order routing platform that routes orders and redeems it. “It has become difficult for SEBI to keep up with the blistering pace that industry is turning ideas and suggestions in to
reality,” said Bhave, congratulating BSE and the mutual fund industry for slew of initiatives taken recently.
Spread over 400 cities and spanning over 40,000 terminals in India, the exchange mechanism of BSE would extend the present convenience of secondary market investors to mutual fund investors. “The new infrastructure, built by stock exchanges, depositories and other stakeholders, is of immense value and would help take the benefits of the secondary market to MF investors,” Bhave said.
“The platform would fuel growth as an additional channel to access mutual fund,” said Madhu Kannan, MD and CEO, BSE. It would also lower the cost, increase convenience and lead to paperless demat future for mutual funds.
The platform allows investors to purchase and sell mutual funds in both physical and demat mode and has both Central Depository Services (India) Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) as its depositories.
“CDSL would shortly partner with NSE’s mutual fund platform,” said Vijay Raut, executive director of CDSL. NSE had started its mutual fund platform with NSDL as depository on November 30.
Clearing and settlement of trade on BSE StAR MF would be through Indian Clearing Corporation Limited (ICCL) on T+1 basis, where mutual fund companies and investors will receive mutual fund units or cash a day after the transaction.
Over 20 mutual fund houses have confirmed participation in the venture and 7-8 fund houses and 103 schemes were available for trading on the first day. The remaining fund houses are to start operations in a few days.