From November 30, investors will be able to transact in mutual funds units via the National Stock Exchange’s fully automated online system. The exchange has issued elaborate guidelines in this regard.
Investors can place subscription and redemption orders online through their demat account as they currently do while trading in the secondary market for equities. Investors not having demat account can place orders in the physical mode through an AMFI certified broker by providing specific KYC documents.
In the case of physical mode of placing order, investors are required to submit redemption request stating the folio number and PAN card.
The system :
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Investors can connect to the NSE’s trading platform through brokers’ telecom network.
“A fully automated online order collection system called National Exchange Automated Trading-Mutual Fund Service System (MFSS) will be provided to the participants (brokers).
The settlement of the units will be through the depository in the demat mode for the demat account holders whose designated bank account will be debited/credited for the order placed on T (trading day) + 1 day.
In case an order is placed through the physical mode, the Registrar and Transfer Agent (RTA) will provide final redemption information to the exchange on T+1 day; the payout, however, will happen according to the scheme’s provisions and within the timelines.
The new MFSS will operate on all business days of the capital market segment between 9 a.m. and 3 p.m.
To start with, depository settlement will be available only for DP account holders in NSDL.
The value for a single transaction, according to NSE, should be less than Rs 1 crore.
http://www.thehindubusinessline.com/2009/11/26/stories/2009112652130100.htm
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