Asia’s oldest bourse, the Bombay Stock Exchange, on Friday operationalised its own platform for transactions in mutual fund schemes for all investors.
Named BSE StAR MF, the venture has received confirmed participation of more than 20 mutual fund houses and seven funds, with a total of 103 schemes that would be available for transaction.
“The platform will offer a low-cost inclusive network to all mutual funds and intermediaries in the mutual fund industry,” BSE Managing Director and CEO, Madhu Kannan, said at the launch of the MF platform, which came less than a week after the National Stock Exchange launched its own platform.
The Exchange has designated the National Securities Depository (NSDL) and the Central Depository Services (India) as depositories to facilitate the new venture.
The NSE had started with NSDL as depository. The CDSL would join the NSE MF platform early next week.
Like NSE, the BSE will waive all charges till April 2010 to attract investors. It will also introduce an investor awareness programme for common investors, Kannan said.
The new platform would enable the exchange’s members to use their existing infrastructure for MF transactions. All MF investors can also use the new electronic platform.
The settlements through the new MF platform will take place on a T+1 basis, meaning both mutual fund companies and investors will receive the cash/units the next day of the transaction.
Launching the initiative, SEBI Chairman C B Bhave said the new infrastructure, built by stock exchanges, depositories and other stakeholders, is of immense value and would help take the benefits of the secondary market to MF investors.
Market regulator SEBI had recently approved transactions in MF schemes through stock exchange infrastructure.
Fund-houses that have agreed to join in the BSE platform include Reliance Mutual Fund, Tata, Birla Sun Life, Fidelity, SBI, HDFC, ICICI Prudential, UTI, DBS Cholamandalam, DSP Blackrock, JM Financial, Kotak MF, Edelweiss, Axis, Mirae, Taurus, Deutsche, J P Morgan and Motilal Oswal.
The BSE, which has a reach to over 400 cities through 40,000 terminals, will utilise the infrastructure of Indian Clearing Corporation Limited, for the clearing and settlement of the transactions through BSE StAR MF.
Presently, there are 37 mutual fund houses operating in the country. The Association of Mutual Funds in India also has plans to come up with its own MF trading platform by March.