NSE to launch new MF service system on Nov 30

Excerpts from India Business Hour on CNBC-TV18 Watch the full show » RELATED NEWS Trading in MF units to start in 15 days: SEBI Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

The National Stock Exchange (NSE) plans to launch a new mutual fund service system or MFSS on November 30, reports CNBC-TV18's Mrinalini Krishna. This new MFSS will allow brokers buy and sell mutual fund units through their terminals. The brokers and the asset management company's (AMCs) will have to approach the NSE to be a part of this system.

Below is a verbatim transcript of Mrinalini Krishna's comments on CNBC-TV18. Also watch the accompanying video.

NSE has announced that it is going to launch its new mutual fund service system (MFSS) on November 30, going live with NSE brokers buying and selling mutual fund units. This new MFSS will allow brokers buy and sell mutual fund units through their terminals. The brokers and the asset management company's (AMCs) will have to approach the NSE to be a part of this system.

Orders will be placed via NEAT-MFSS order collection system. This means that the system of brokers, punching their order through terminals, will then generate a unique confirmation number for every order which will be given to the investors. The investors also have a choice to two modes its investments­­­­­­--the physical and the depository. In the physical investment, all their documents along with this confirmation number will be send physically by the brokers to the AMCs through the register and transfer agents.

In the depository mode, the broker will transfer this information in a demat format through the depository. Currently, NSE is allowing only National Securities Depository (NSDL) as a depository buying and selling of mutual funds units through NSE. The transactions will be cleared on T+1 basis. Securities and Exchange Board of India (SEBI) had earlier announced that the brokers will be allowed to buy and sell mutual fund units. NSE has clearly taken the lead and is going live on November 30.