Association of Mutual Funds in India (Amfi) is set to revive its online platform. It had earlier scraped the plan in 2009, after Bombay Stock Exchange and National Stock Exchange started to offer mutual funds online. Poor volumes and lack of participation from the brokers to sell units online, have led Amfi to revisit its plan and start an online trading platform.
According to industry participants, Amfi committee of operation and compliance is currently looking into the technicalities for starting the platform. V Ramesh, deputy chief executive of Amfi says, ?Its too premature to comment on these issues. It will be finalised only after all the technical issues are dealt with.? No concrete plan has been finalised by the committee yet, he said.
A committee member said, ?The exchange platform is not working (well); the volumes are falling and there is no public awareness about it. Due to lack of compensation, brokers are also not encouraged to sell units online. He added that it makes sense for the industry to start their own platform to sell and buy units.
The online platform of NSE called Mutual Fund Service System (MFSS) was launched in November 2009. The daily monthly average NSE transaction value in April, 2011 was over R1.7 crore (including subscription and redemptions) while it was over R3.3 crore on the BSE StAR platform. In the month of July, last year, BSE star had hit all time high of over R3.5 crore, but since then it has not able to surpass that figure.
Krishnamurthy Vijayan, MD and CEO of IDBI MF says, ?The online mode of investment is too new for our country. People still prefer going through a distributor. It will be useful if the platform is offline and online.? He didn?t comment on the Amfi platform.
In 2009, Amfi had dropped its plan to start its online platform as the features were similar to that of both the exchanges. Jaideep Bhattacharya, CMO of UTI MF was chairman of the panel which constituted to set up the trading platform.