The above circular mandates an inter-operable industry-wide Platform to be developed and maintained by MF RTAs where investors can carry-out all their transactional needs, monitor their execution and take out certain reports. In the process, it is envisaged that all the investor facing processes would be standardised and their experience would be elevated.
Over a period, the platform would cover the needs of distributors, Registered Investment Advisors, Stock Exchanges and other digital platforms through Application Programming Interfaces(APIs). The Platform would become operational in phases with Non-Financial Transactions in the first phase and with full functionalities by 31st December 2021.
Background: Mutual Fund investors’ transactions can broadly be classified into two categories – Financial transactions(FT), which involve money flow and creation / extinguishment of units) and non-financial transactions(NFT)), which involve change of static details like email, mobile number, bank account information, nominee etc
Presently, there are multiple platforms provided by various stakeholders like AMCs, RTAs, distributors, exchanges etc. to carry out transactions. Largely, these platforms focus on financial transactions with few electronic options available to investors on non-financial transactions. Also, there are different practices followed regarding transactional requirements, especially on NFTs between AMCs, RTAs leading to varying experiences for the investors.
Implications for CAMS: The Company believes that this a major initiative in enhancing investor experience to start with and in providing enhanced services for the entire eco-system (distributors, digital platforms) as the project expands to cover all stakeholders. While elevating investor experience, the company believes, that this will reduce duplication of efforts and risks for the eco-system while taking digitization of transactions to next level.
Execution of transactions received through the proposed platform will continue to be done by the respective RTAs servicing the AMCs to whom the transactions pertain to. The changes to back-end systems are not expected to be material. The Company estimates that from a financial standpoint, the proposed initiative does not have any material impact. However, this reinforces the key role that the RTAs continue to play in the MF ecosystem.
The company is engaging with other MF RTA, to conceptualize, design and build this platform for the use of investors and the broader industry eco-system.
At around 1:10 PM, Computer Age Management Services was trading at Rs3,157.90 apiece down by Rs69.25 or 2.15% on Sensex.