27 February, New Delhi: The securities and exchange board of India (Sebi) has decided to allow investors direct access to the infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units. The regulator said that the move will increase the reach of their platform.
It noted that mutual fund distributors, along with Sebi registered investment advisors (RIAs), were earlier allowed to use recognised stock exchanges' infrastructure to purchase and redeem mutual fund units, including direct plans, directly from asset management companies on behalf of their clients.
“In order to further increase the reach of this platform, it has been decided to allow investors to directly access infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units directly from mutual fund or asset management companies,” Sebi said.
Suren Kochhar, sales and marketing head, YES Asset Management, said that the move will help those investors who want to manage their own portfolio, which may also increase penetration and the implications of expenses on direct plans.
“However, one should not treat MFs like shares as the underlying securities are managed with certain fundamentals. Distributors have a pivotal role to play in creating investor awareness about MFs and handholding them throughout their investment journey,” he added.