75-80% transmission requests are handled by CAMS in 7 days

MF Central started with live non-financial transactions on the platform in September 2021. Then came the app and the financial transactions were activated only a few weeks back. The platform was supposed to be fully functional by December 2021. Why was it delayed?

We went live with the website in September and then got two apps, both Android and iOS, in December 2021. In the interim, there were regulatory changes- how to accept money from investors and how to allocate units against these. , There was also a need for third party verification of for-profit bank accounts and strong ironclad authentication through two factors. It was quite extensive and therefore the original design of the MF Central could not have been as originally planned. All these changes had to be incorporated. So, that’s how we went live with financial transactions in May 2022.

We are now going live with the CAS (Aggregated Account Statement) API on partner and platform websites. We are also going live with asset managers facilitating non-financial transactions on digital assets.

So, from a consumer perspective today, 16 out of the 17 non-financial transaction categories are all functional, except for the signature change that hasn’t been made live.

From the perspective of financial transactions, 90-95% of these have gone live again. You can do what’s called a new purchase and an additional purchase. You can start a SIP (Systematic Investment Plan); You can also switch and redemption. So, these are the Big Five live.

What is not yet live is that consumers who are new to capital markets and who have not previously complied with KYC (Know Your Customer) cannot create a folio. Also Systematic Transfer (STP) and Systematic Withdrawal (SWP) are not possible. Together, these three do not contribute more than 10% of the financial transactions.

What is not live yet is that a non-KYC consumer (someone who is entering capital markets for the first time) cannot do KYC and create a folio. Also Systematic Transfer (STP) and Systematic Withdrawal (SWP) are not currently possible. These should be available in the next 30 days. Together, these three do not contribute more than 10% of the financial transactions.

Highlight the major non-financial transactions for which users use MF Central.

Now, one of the most popular transactions is the addition of a nominee. It was earlier a paper-intensive process but is now seamless on the basis of OTP (One Time Password). You can also change your bank account. A compliant dashboard is available and a complete portfolio view of all holdings including Demat and ETF is available. Therefore, from an investor’s point of view, it enhances the experience significantly.

You can also do the first stage of transmission—the process of transferring the ownership of mutual fund units to a surviving unitholder (in case of a jointly held folio) or a nominee on the death of the unitholder—though the second is still the exact same way. Used to be.

So, what a person can do is that if the first unit holder is not alive, then to upload his information and death certificate can be done in an operation that travels in the MF industry. So, it means that the information has now come to the RTA (Registrar and Transfer Agent) and after that, the indemnity and documents have to be submitted to the RTA in physical format. There are visual means of automating the rest of it as well. I can’t tell you a date and plan for when that will happen. So, you will see further refinements in the transmission process.

Each AMC has its own procedure for transmission and requires a separate list of documents. So, how is it done in MF Central?

Considerable progress has been made in this area with the formation of the Ease of Doing Business Committee. There used to be non-uniformity in the list of documents, the value of the stamp paper and the text of the indemnity. So, to a large extent, it has been integrated as a result of the functioning of that committee. All these are available on the MF Central platform and can be downloaded, printed and signed.

Does the transmission take a long time to complete?

Let me give you a statistic: 75 to 80% of transmission requests are handled within seven days of arriving at our front office. And for a lot of them, we only get access to scanned images. In some cases, we ask for physical documents.

In case of jointly held portfolios, investors are unable to transact on the platform. When is this likely to change?

Today more than 90% of folios are conducted either alone or in ‘either or survivor’ mode. These folios have been covered. For joint folio, we have to take consent from both the holders. And then both would have to be available at the same time to be able to say yes. So it’s a slightly more complicated flow, which is what we had to choose from when we went live. It represents only 10% of the market. This requires some changes and will probably take a few more months.

How do MF Central users get customer support?

They can send an email for any issue. Till date there is no helpline number.

Are there instances where users have not been able to see their investments on the platform?

The only condition is that PAN and mobile number or PAN and email ID should be present everywhere. So, if these are there, it will be an aggregate.

When was MF Central App launched?

So, this app was first launched in Android and then iOS in December 2021. In all, MF Central has 250,000 subscribers. So, that’s about 1% of Pan’s universe in the overall MF ecosystem. On a daily basis, we are now seeing around 8,000 unique logins.

Some app reviews by users highlight log-in issues. How are these being resolved?

I’ll be honest with you. What I’ve seen is a lot of good comments coming in from investors. I guess, it was always their wish to see a single live statement and not something that came by mail and allowed them to do non-financial transactions. It is possible that during the beta phase, there may be a website loading or traffic related issue, not that we have heard much of them. But today, if you turn to Twitter, which is the best indicator of investor experience, you’ll see an equally positive sound bite.

MF Central was originally envisioned as a platform for investors, mutual fund distributors and RIAs. Whereas even today it is only for investors. When will it be rolled out for distributors and RIAs?

One big thing the industry has always wanted was a live CAS. That API is now live and there are platforms that have already signed up with us that are integrating. So, a part of bringing in platforms, RIAs and distributors is already fully underway. The other is the non-financial transaction API, which is ready. We are only doing this live in phases because there is a significant amount of testing and integration work. So, that just leaves the Financial Transactions API, which could be four to six weeks from now.

There have been instances where email id and mobile number are not being entered in the account details of all new folios with AMC where CAMS is RTA. This can deny investors access to their investments. How is this being resolved?

The industry has gone through a series of changes (protocol of two-factor authentication, third-party verification and no pooling of funds) over the past few months and these were to be implemented. We have always announced the success of such work immediately upon completion on our website. However, what happened was that some partner organizations were not fully prepared, perhaps for a few days and at that time, CAMS worked very closely with partner organizations, be they payment gateways or distributors. So, the consumer only knows the CAMS and if they see that something is not going right, they will tag and talk to us, in which case, obviously, our marketing team and social media division contact them. It was all arranged. But what I want to assure you is that they were ecosystem issues and not CAMS-level issues, but were interpreted as CAMS.

Why is MF Central needed when there are other platforms too?

So, think of it as a thin veneer on the RTA platform. It’s real time, it’s live. There is no deadline, nothing is batching. Otherwise, the mutual fund industry is largely built on batching, which means you deposit multiple things, build a stack, and once you have that stack, to push it to RTA, whether digital or Physically, this is how the system works. From the CAMS perspective, the platform has ETF and Demat data that never used to be and with the digitization of non-financial transactions, has taken a huge leap in terms of delivering that benefit.

We will democratize the ecosystem, which means that once these APIs reach other platforms, they will have the same advantages. We are democratizing in a big way. And so, for MF Central more than creating a brand or product, we are building a facilitator in the mutual fund industry. That’s the real moto.

Today I can do my non-financial transactions on MF Central. So, as you share with other platforms, won’t you lose your competitive advantage?

Correct. It is a question of defining priorities. Therefore, when it was being designed, it was a cornerstone for investors and was not meant to create a unique asset. So, we’ll continue, following that, no matter if it means giving some competitiveness.

What are your plans for monetizing the platform?

Till now the build phase has been completely free for all, we are not allowed to charge from the investors. So it won’t happen. There are potentially monetization opportunities in the API. In particular think about the CAS API or the Financial Transaction API which may lead to some element of revenue. So we’re actively looking at and figuring out where any of that might come from. But like I said, more than profit or revenue motive, it has been an industry level utility creation model.

Markets regulator SEBI has recently issued a consultation paper in which it has asked to apply insider trading rules to the trading of mutual fund units as well. The paper mentions at the outset, in the past, it was observed that an RTA of a mutual fund had encashed all its units from a scheme for some sensitive information relating to the scheme of the mutual fund, which was yet to be communicated was. Unit holders of a particular scheme. What is your take on this, and can RTAs based on their role easily misuse information? Do any regulatory checks and balances exist?

One, of course, my only comment would be that the titled RTA is not CAMS. Secondly, we have very significantly intertwined with the mutual fund ecosystem, especially on the operational side of liabilities. We are the data keeper of the mutual fund industry. Therefore, to that extent, sensitive information comes to us and is stored by us. And, so far, we’ve demonstrated the most pristine form of diligence and accountability in handling that information for three decades.

There has been a huge framework around us on data management, data leak prevention, data and cyber security risk mitigation and it has been built over the decades. And monitoring of this whole structure is important, through important checks and balances, audits, tests, control posture and independent committees, auditors, advisory committees, technology committees, etc. And very little of that monitoring is something that we do ourselves, there is external monitoring at all levels.

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