SEBI allows registered brokers to sell mutual fund schemes
Market regulator, the Securities and Exchange Board of India (SEBI) on Friday paved the way for further widening of the distribution network for mutual funds by allowing registered brokers to sell mutual fund schemes.
The stock brokers can now act on the behalf of their clients by acting as official points of acceptance, under the mechanism set up by stock exchange.
The regulator informed through a circular, "The infrastructure that already exists for the secondary market transaction through the stock exchanges with its reach over 1,500 towns and cities, through over two lakh stock exchange terminals can be used for facilitating transactions in mutual fund schemes."
But the stockbrokers are required to clear certification exam held by Association of Mutual Funds in India (AMFI) for becoming eligible for empanelment. The registered brokers must divulge their location in its offer documents and websites. The move could benefit end users who can make transactions from the office near to them. The stock exchanges are also told to set up an investor grievance handling mechanism for addressing disputes between brokers and clients.
Arindam Ghosh, CEO of Mirae Asset Management says, "The market regulator has come out with very interesting step. This move will increase the volumes of the fund schemes and will also benefit the investors."