Common application form for mutual funds not yet materialised

CAF could be used for new purchases, redemptions and even switching between two schemes

June 28, 2012 1:19 IST | India Infoline News Service
The introduction of common application form (CAF) to invest in various mutual fund schemes in the near future seems difficult as fund houses have not yet materialised on the same.

At present, fund houses are issuing consolidated account statements (CAS) to investors. They have also started issuing a standard common KYC (know your customer) application form. CAF is considered to be the next step, which would allow investors to fill a single form, for making investments in schemes of various fund houses.

According to the suggestions made, CAF could be used for new purchases, redemptions and even switching between two schemes. CAF would also help distributors, who can conduct business with a common form and don’t have to carry several forms of different asset management companies (AMCs).

However, things for introduction of CAF have not yet materialised. The industry body AMFI (Association of Mutual Funds in India) is working on setting up an industry-wide common transaction utility platform. However, no information is provided on the time period, when the transaction utility platform will be operational. Once the platform is developed, it will provide a single touch for everything related to mutual fund investment.

Besides creating a common platform for MF investment, there are issues related to standard disclosures. International fund houses have their own set of standard disclosures, while domestic fund houses seek more information in their application forms.

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