SEBI to introduce ‘execution-only platforms’ regulatory framework for mutual fund schemes | Jobs Vox


It will be open for business from the second working day after the election results are published, SEBI said.

It will be open for business from the second working day after the election results are published, SEBI said Photo credit: Reuters

SEBI on Tuesday said it will introduce a regulatory framework for “execution-only platforms” for direct schemes of mutual fund schemes to further promote the penetration of such instruments as investment vehicles.

A number of entities including investment advisors (IAAs) and stock brokers offer execution services such as buying and selling mutual fund schemes through digital mode.

At present, apart from the regulatory requirements applicable to IAs and stockbrokers, there is no regulatory framework to provide such “execution-only services” directly in mutual fund schemes, Sebi said in a statement after the board. Meeting.

The move will increase convenience for investors to invest through Execution Only Platforms (EOPs) and will help ease execution of platforms by enforcing only the relevant regulatory compliance required for EOP activity.

Under the system, an entity seeking to provide execution-only services in a mutual fund direct scheme can register as an agent of asset management companies registered with the Industry Body Mutual Fund Association in India under one of two categories – Category 1 EOP (AMFI) or Category 2 EOP as an investor agent, as a stockbroker. Registered.

The detailed framework and similar implementation strategies, nature of services that can be provided by EOPs, cyber security requirements, service pricing, complaint handling mechanisms and others will be notified in a circular, said Sebi.

The 43-player mutual fund industry has grown exponentially over the past decade and currently the industry has a value under management (AUM) of Rs 40 lakh crore. In the year As of April 30, 2020, AUM under direct MF schemes stood at £16.94 lakh crore.


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