SEBI on Friday allowed distributors another channel — stock exchanges — to buy and sell mutual fund units on behalf of their clients.
Earlier, the facility was available only to stock brokers and clearing members.
With this, mutual fund distributors would be able to improve their reach. However, SEBI said distributors would not handle the fund pay-in and pay-out on behalf of investors.
The regulator directed exchanges to ensure that pay-in of funds was directly done to the clearing corporations and pay-out to investor bank accounts.
Similarly, mutual fund units would also be directly debited or credited to investor demat accounts.
Exchanges and clearing corporations have been directed to spell out detailed operating guidelines for mutual fund distributors and make necessary amendment to their existing byelaws, rules and regulations.
On Friday, mutual funds did a volume of Rs 21.4 crore on the BSE.
raghavendrarao.k@thehindu.co.in