You can buy MFs online soon
The Securities Exchange Board of India (SEBI) wants to allow e-commerce firms to sell mutual funds online with due precautions. In the age of digital world, financial services are limited to only professionals due to various complicated governmental norms.
A SEBI panel on the digitisation of financial services, headed by Infosys co-founder Nandan Nilekani submitted a report on May 30. After that, SEBI has forwarded the recommendations to Association of Mutual Funds in India (AMFI).
For selling of mutual funds online, SEBI has recommended selecting few online marketplaces on the basis of net worth of the company, customer base, sales, brand popularity, after-sales track record, etc. The idea is to ensure that only reliable companies sell these high-risk financial products. SEBI believes that customers are more inclined towards buying from reputed channels such as Flipkart, PayTm etc.
Under the new recommendations, people can buy mutual funds through e-commerce at the lowest commission rate. The consumers will get a smooth and continuous experience without any technical glitch while buying mutual funds online. SEBI has also recommended reducing other hassles and formalities often faced while buying mutual funds.
Customers will not have to go for additional in-person KYC process before buying mutual funds online. However, they may have to provide PAN or Aadhaar after submitting their other details while buying a mutual fund scheme.
Considering safeguards of the scheme for mutual funds, SEBI has suggested to submit customers profile first and the funds that will suit them can be bought,after factoring the risk criteria of the person.
The government will design the process in a manner, that will warn people if they choose unsuitable products. A person will see a warning message if he chooses a product involving high risk. SEBI has also recommended putting an upper limit of Rs.50000 on these investments through e-commerce platforms to prevent misuse of this service for money laundering activities.