Investors can now directly purchase or redeem mutual fund (MF) units using the stock exchange platform, a facility that was hitherto only available to distributors or investment advisers.
In a circular issued on Wednesday, the Securities and Exchange Board of India (SEBI) extended the facility to all mutual fund investors.
“In order to further increase the reach of this platform, it has been decided to allow investors to directly access infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units directly from mutual fund/asset management companies,” stated the circular.
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In 2013, the capital market regulator had allowed mutual fund distributors to use the stock exchange mechanism to purchase or redeem mutual fund units on behalf of thier clients.
Thereafter, SEBI Registered Investment Advisers (RIAs) were permitted a similar facility in 2016.
The latest development is expected to further ease the manner in which individuals can invest in mutual funds. Incidentally, there are already a lot of start-ups that allow investors to invest in direct plans using their apps.
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