MF Utility is a web-based transaction portal through which investors can invest in direct mutual funds offered by 25 (as of now) fund houses. Mr. V Ramesh, Managing Director and CEO of MF Utility, answers some common questions investors ask about the facility.
This is the website of MF Utility: www.mfuindia.com
Extract from investor page:MF Utility (MFU) is an innovative initiative from the Mutual Fund Industry which offers convenience and empowers the investors of Mutual Fund schemes. MFU facilitates the investors with a Common Account Number (CAN) which enables them to transact in multiple schemes of various Mutual Funds participating in MFU through a single transaction and consolidated payment. MFU provides a 24x7 universal online access across Mutual Funds to investors to access NAV and Scheme related information and content. Through MFU, investors will be able to have a consolidated view of their holdings and transactions at industry level. MFU will also provide value added services like Common Account Statement (CAS), Alerts, Triggers, Reminders etc., to investors.
Now to the FAQ. I have covered the basic, important questions in our minds. If you have more questions, I will request Mr. Ramesh to answer them. In any case, more details will soon be available on their site.
1. Cafemutual recently reported that that the distributor leg of mfuindia will be operational from May. Now that SEBI has greenlighted it, can you please give us a tentative date when the facility will open for investors?
We are working out the date of launch. We will be launching very soon. We are looking to launch around March 2015. Date to be finalised yet.
2. What is the procedure of applying for CAN? How should new investors apply?
MFU will have "CAN Registration Form (CRF)" which the new investor should fill up and submit for creating the CAN. In case the investor has not completed the KYC procedure, the investor shall submit the KYC form as well.
3. Once the Common Account Number (CAN) is allotted, will I be able to consolidate all my existing holdings, buy and sell units freely from the funds of all participating agencies via mfuindia like I do from individual AMC portal?
CAN is issued for an investor combination. Once CAN is issued, all the folios held in the participating agencies will be mapped to the CAN. Subsequently, the investor will be able to transact in all those folios quoting the CAN that is issued. Further, in case the investor is looking to invest in a new MF, they will be able to simply transact instead of opening a folio in that Mutual Fund. When the investor transaction is enabled, the investor will be able to transact in all the participating AMCs.
4. Will I be able to switch holdings between funds of the same AMC and also between different AMCS - that is from fund A of amc X to fund B of amc Y without having to redeem and reinvest?
Switches between funds of the same AMC will be allowed as it is being allowed today. Switch from one AMC to another is not permitted.
Do join me in thanking Mr. Ramesh for his time and effort in answering these questions. Please share this post to increase awareness about this facility.
My understanding now is, once the MF Utility opens shop for investors,
1. We need to apply for a CAN (details awaited)
2. Wait for all folios to be consolidated with the CAN and transaction rights to be enabled
3. One can then conveniently invest in direct mutual funds and switch units in regular-option funds to direct option funds within the same AMC.
4. I think inter-amc switching will never be allowed.
5. I think it is pretty decent for a start. If more and more investors start using this facility, hopefully, more features will be added.