MUMBAI: Mutual Fund Utilities, or MFU, a company funded by mutual fund companies is widely used by distributors and investors for their transactions. Industry funding keeps the MFU portal free. However, a new MF transaction portal created by CAMS and Kfintech called MF Central has challenged MFU’s dominance. MF Utilities CEO Ganesh Ram chats with Mint to explain what MFU is doing to improve its own offering.
How relevant is MFU to today’s mutual fund investors?
We have nearly a million investors. They can conduct financial and non-financial transactions and track the status of their transactions. They can see their full unit holdings. They can invest in direct or regular schemes and consult their statement of capital gains. They can get a consolidated statement which we call COTS. We also allow investors to use the physical MFU form for asset management company (AMC) transactions with a physical check. Remember that 15% of all transactions are still in physical form.
What is the gap between distributors and direct investors in MFU?
About 3.2 lakhs of our users are direct investors and the rest of the million users are distributors.
What new features are you launching?
We are launching back office software for Registered Investment Advisors (RIAs) and Mutual Fund Distributors (MFDs) on October 15th. It was built in-house. Intermediaries are currently purchasing third-party software that has certain problems. For example data security. This tool will have a revenue reconciliation function for distributors as well as portfolio rebalancing. This will not be offered for free, but will be offered at a heavily subsidized rate.
For investors, we will also be launching a multi-function portfolio analyzer which will be particularly useful for new fund offerings (NFO). As you know, NFOs do not have a history and therefore our tool will help you with that. We are also introducing a risk profile for investors which is based on behavior rather than just income. Finally, we are making the integration on MFU easier and this simpler process will be launched on October 1. Currently we are requesting a self-certified copy of the PAN card and a scanned copy of the check. After October 1, we will simply request the PAN number and retrieve the details from the KYC Registration Agency (KRA) database. A scanned check will still be required. Currently, it takes some time to generate a Common Account Number (CAN) and allow investors to transact. After October 1, an existing MF investor will immediately obtain a CAN and will be able to transact. If the investor is new to mutual funds, we will steer them toward completing an eKYC process. Finally, we launched a banking module and two large public sector banks joined MFU as distributors. We are also working on the integration of cooperative banks.
The RTAs are launching a new transaction portal tomorrow, MF Central. How does this compare to MFU?
All the services offered by the new portal such as changing email or bank are already available on MFU. The only exceptions are the electronic consolidated account statement or eCAS and details of unclaimed dividends, although we have our own CAS. Note that they only offer non-financial transactions while MFU already offers financial transactions as well as non-financial transactions. Also read the Sebi circular setting up the new portal. He says that whatever services will be available there, they must also be made available to other digital platforms. Thus, for example, the transmission of units (in the event of the death of a unitholder) is currently offline. If this is made available on MF Central, they will also have to activate other digital platforms. Also note that there is currently no standardization between the registrar and transfer agents or RTAs. For example, even their reasons are different for the transactions they reject. I’m curious to see how this platform, MF Central, will play out.
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