NSE launches mutual funds trading – but for UTI only

The country's top mutual fund houses are keen to join the National Stock Exchange's new mutual fund service system (MFSS), launched on Monday. However, apart from UTI Mutual Fund, other players may not find entry easy, at least initially. The MFSS will start with equity funds of UTI only.

''This is a pilot project. The rest of the fund houses will join later,'' an unnamed source from the industry told Business Standard. He said Birla Sun Life MF will be the second to join the platform.

Initially, UTI – now owned by several public sector banks - will list its equity and debt schemes that number about 30, reports said. Along with UTI, ''all top mutual fund houses are keen to join this platform,'' they added.

Moreover, unlike some of the close-ended schemes already being traded on the exchange, the new units would not be available at a discount to the net asset value. The unit price will be based on the day's NAV.

Moreover, trading in mutual fund units would come at a price to investors, who would have to pay the brokers' fees levied for trading through terminals and also fees that the exchange or the NSDL may levy. Such charges dilute the advantage of abolition of entry-load.

Market regulator Securities and Exchange Board of India recently gave its approval for transactions in MF schemes through the stock exchange infrastructure. (See: SEBI permits brokers to trade in MFs)