Now, buy MF units directly through your broker

It is another paradigm shift for the mutual fund industry from the stables of the market regulator. Securities and Exchange Board of India (SEBI) has permitted brokers to use stock exchange terminals to buy or sell mutual fund products, reports CNBC-TV18's Mrinalini Krishna.

In a move to bring out more reach to mutual fund products, SEBI has allowed brokers to use their stock exchange terminals to carry out trade in mutual fund products. This would essentially mean that investors would tell their brokers who would punch in their trade and via the stock exchanges this is going to reach the registrant transfer agent which will then carry out the allotment of the mutual fund units.

The SEBI has in its circular asked the exchanges to issue detailed guidelines for the process and also set up an investor grievance process. The impact essentially of this move is going to be more reach for mutual fund products. It is going to bring about more convenience for the investors who do not necessarily have to go to a separate distributor now.

It may be a blow for the mutual fund distributors and individual financial advisor (IFAs) who are already struggling with the no entry load and it is going to be more cost effective for asset management companies (AMCs) and the brokers.

What we learn exclusively from our sources is that one such platform is already ready and is being fine tuned to be piloted as early as next month, in early December. With this move of SEBI and Association of Mutual Funds in India (AMFI) coming up with two online platforms, there is a lot happening in this space.