We have seen frequent changes in mutual
fund forms and kyc norms recently. It’s really painful to approach all
the AMC’s separately and complete the formalities. After Fatca now new
NACH form is introduced wherein one time bank mandate is required to be
registered for future SIP. These frequent changes not only disturbed the
distributors but also investors are also not happy with this type of
changes. Undoubtedly the mutual fund investment is much better way of
investment avenue which is not only transparent but also tax friendly.
The procedure and frequent changes are cumbersome and block to its
growth. There are online platform available to transact but still it’s
not that much popular and large number of investors invest offline by
filling up physical forms.
So is there any better way to transact mutual fund wherein you can reduce the paper work. The answer is Yes. Year back MF Utility is launched to reduce the paper work and I think its best way to transact in mutual fund. MF Utilities India Pvt Ltd (MFUI) is the Shared Services initiative formed by the Asset Management Companies (AMCs) of SEBI registered Mutual Funds. The prime objective of MFUI is to consolidate all “Transaction Requests” received by the industry from multiple sources and transmit it to the “Fulfiller” of the request (Transfer Agent), thereby bringing in operational efficiency by reducing multiplicity and duplication of activities. MFUI is equally owned by the AMCs of SEBI registered Mutual Funds in India The important features are as under which can help us to reduce the paperwork.
1) Common Account Number:
MF utility provides opening of CAN to manage all mutual fund investment across all the AMCs. Investor has to open once the common account number and after opening this account they can transact across all the mutual fund houses under one account number. Investor can open CAN under single, either or survivor or joint folio similar to common practice while opening the new folio with any AMC. The investor needs to submit copy of PAN card, KYC details and cancelled cheque of sole/first investor while opening the account. After opening CAN there is no need to open separate folio with every AMC. There is standardise forms and process already in place which not only reduces the paper work but also saves time and energy.
2) Multiple bank account possible:
CAN allows investor to register five different bank accounts while opening the account. This can help investor to decide in which bank they want redemption amount to come. Surely five accounts are more but it is not compulsory to give five bank account details. Investor can register even one bank account while opening the account, but if anybody wants to register more bank account it is possible at the initial stage only.
3) Multiple Transactions Possible:
After opening account investors can initiate multiple transactions for purchase, Switch and redemption. At present five schemes can be transacted in single form. Similarly multiple STPs and SWPs are also possible through single form. So if any investor wants to invest in five different schemes of different fund house this new option allows him to open CAN and transact with single form instead of opening five different folios in each AMCs. The same way five SIPs can be started by filling single form or five switch or redemption can be done with single form. Investor need to sing and draw a single cheque for transacting in five schemes instead of five cheques which are required if you approach all the AMC separately.
4) Existing folios mapped to CAN:
After opening common account number all the existing folios of the investor matching the CAN criteria is mapped to the CAN. Investor will also get all earlier and future investment details on his/her mail regularly or can ask for the details whenever investor wants from MF Utility. Distributor through whom investor has transacted can also give all the required information whenever needed.
It is also important to note that CAN application form and all transaction forms can be submitted to either MF Utility, CAMS or Karvy centers instead of approaching multiple AMCs. All future changes in procedures can be easily done at single point. Distributors can also see all the transaction online which will help them to review investor’s portfolio easily and recommend suitable changes. I think this platform is very much timely and can help both distributors and investors to reduce the paper work and come to single point of contact for all future transactions in mutual fund. Distributors need to shift to this platform at earliest to reduce the paper work and also time and energy. This will also add value to go green initiative in our country.
So is there any better way to transact mutual fund wherein you can reduce the paper work. The answer is Yes. Year back MF Utility is launched to reduce the paper work and I think its best way to transact in mutual fund. MF Utilities India Pvt Ltd (MFUI) is the Shared Services initiative formed by the Asset Management Companies (AMCs) of SEBI registered Mutual Funds. The prime objective of MFUI is to consolidate all “Transaction Requests” received by the industry from multiple sources and transmit it to the “Fulfiller” of the request (Transfer Agent), thereby bringing in operational efficiency by reducing multiplicity and duplication of activities. MFUI is equally owned by the AMCs of SEBI registered Mutual Funds in India The important features are as under which can help us to reduce the paperwork.
1) Common Account Number:
MF utility provides opening of CAN to manage all mutual fund investment across all the AMCs. Investor has to open once the common account number and after opening this account they can transact across all the mutual fund houses under one account number. Investor can open CAN under single, either or survivor or joint folio similar to common practice while opening the new folio with any AMC. The investor needs to submit copy of PAN card, KYC details and cancelled cheque of sole/first investor while opening the account. After opening CAN there is no need to open separate folio with every AMC. There is standardise forms and process already in place which not only reduces the paper work but also saves time and energy.
2) Multiple bank account possible:
CAN allows investor to register five different bank accounts while opening the account. This can help investor to decide in which bank they want redemption amount to come. Surely five accounts are more but it is not compulsory to give five bank account details. Investor can register even one bank account while opening the account, but if anybody wants to register more bank account it is possible at the initial stage only.
3) Multiple Transactions Possible:
After opening account investors can initiate multiple transactions for purchase, Switch and redemption. At present five schemes can be transacted in single form. Similarly multiple STPs and SWPs are also possible through single form. So if any investor wants to invest in five different schemes of different fund house this new option allows him to open CAN and transact with single form instead of opening five different folios in each AMCs. The same way five SIPs can be started by filling single form or five switch or redemption can be done with single form. Investor need to sing and draw a single cheque for transacting in five schemes instead of five cheques which are required if you approach all the AMC separately.
4) Existing folios mapped to CAN:
After opening common account number all the existing folios of the investor matching the CAN criteria is mapped to the CAN. Investor will also get all earlier and future investment details on his/her mail regularly or can ask for the details whenever investor wants from MF Utility. Distributor through whom investor has transacted can also give all the required information whenever needed.
It is also important to note that CAN application form and all transaction forms can be submitted to either MF Utility, CAMS or Karvy centers instead of approaching multiple AMCs. All future changes in procedures can be easily done at single point. Distributors can also see all the transaction online which will help them to review investor’s portfolio easily and recommend suitable changes. I think this platform is very much timely and can help both distributors and investors to reduce the paper work and come to single point of contact for all future transactions in mutual fund. Distributors need to shift to this platform at earliest to reduce the paper work and also time and energy. This will also add value to go green initiative in our country.
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