MF platform: Exchanges slug it out to woo investors

Excerpts from India Business Hour on CNBC-TV18 Watch the full show » RELATED NEWS Cooperate more, compete less: SEBI tells SEs, depositories India mutual fund trade gets multi-terminal boost Nifty BSE | NSE 30/05/12 Are Mutual Funds betting on Nifty?

The battle between the stock exchanges has found a new arena - the mutual fund buying and selling platform. While the regulator is happy about the pace of the development of the platforms, the exchanges have to sweat it out more to attract more investors. CNBC-TV18's Mrinalini Krishna and Priyal Guliani report.

It is the clash of the titans to attract more investors for their mutual fund platforms, the Bombay Stock Exchange and the National Stock Exchange are going all out. While the week began with the launch of NSE's mutual fund service system (MFSS) on Monday, today the BSE launched its BSE Star MF platform.

BSE went live with seven mutual funds and both the depositories NSDL and CDSL while it also has in-principle approval from 13 other funds. The BSE Star MF is a web-based access programme, which can be accessed by brokers outside the reach of the BSE network.

The NSE has started with UTI Mutual Fund and has been joined by four other funds. Here too, NSDL is a partner and CDSL is expected to come on board on Monday. The NSE depends on NEAT technology to power its MFSS.

On day one, while BSE garnered 251 orders worth Rs 8.4 crore, BSE collected 316 orders valued at Rs 78 lakh on its first day.

And, the regulator is happy with the pace at which the exchanges have delivered.

"It is remarkable that we had come out with the circular 15 days ago and now we have this platform," said SEBI Chairman CB Bhave. "This will change the way we do business."

Now the exchanges are trying every trick in the book to attract investors. After NSE, the BSE too announced a waiver in its fee for the BSE Star MF.