| Frequently Asked Question - Mutual Fund Service System (MFSS) for Investors |
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| 1. What is MFSS? |
| Mutual Fund Service System (MFSS) is an online order collection system provided by NSE to its eligible members for placing subscription or redemption orders on the MFSS based on orders received from the investors. This will enable to expand the reach of mutual fund schemes to more towns and cities. Investors can approach Religare for placing order on MFSS. |
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| How is MFSS different from existing process for subscription to and redemption of mutual funds?
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An investor interested in subscribing to a mutual fund had to identify a distributor
of the mutual fund and submit all documents along with payment instrument where
applicable to the distributor or directly to Mutual Fund/AMC/RTA. The
subscription/redemption request would thereafter get processed and investor would know
about status of the request only in the form of direct communication from Mutual
Fund/AMC/RTA.
In the MFSS, investor will have an opportunity to deal with SEBI registered NSE member who is eligible to participate in MFSS for subscription/redemption of units. Members would enter the order into MFSS. Investor would be able to know the order details and modify his order details till the order acceptance time ends i.e. up to 3.00 pm. By end of the day investor would also get to know about the validity of his order and the value at which the units would get credited/redeemed to his account.
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| 3. What are the benefits of using MFSS for participation in mutual funds? |
. Investor would able to get a single view of his portfolio across multiple assets like
securities, mutual fund units etc.,
. Investor would be able to get services from same intermediary for different asset class
. Investor would be able to optimize his investment decisions due to reduced time lag in
movement of funds
. Investor would have a voice in agreeing on charges to be paid for services rendered.
. Reduction of paperwork
. Transparency in knowing status of order till completion thereby reducing disputes
. Recourse to grievance resolution in case of deficiency in service provided by member
. Faster Execution with allotment in demat account the next day of purchase. |
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| 4. Can an investor enroll for a Systematic Investment Plan (SIP) though this platform? |
| No. currently SIP transactions cannot be done through this platform, but in future there is proposal
for such facility. |
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| 5. Who all can are eligible to participate in MFSS? |
| Individuals, HUF and Body Corporate can participate in MFSS subject to completing the KYC procedure. In case of a minor the guardian would have to be KYC compliant. |
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| 6. Can Units of all Mutual Funds and all Schemes be subscribed or redeemed using
MFSS? |
Asset Management Companies (AMC) desirous of offering MFSS to their existing and prospective customers enter into an arrangement with Exchange and only schemes of such AMCs would be available on MFSS. All schemes which are available on MFSS would be informed to the Participants and investors through issue of circulars from time to time. The currently available schemes on MFSS are available in Religare website.
http://www.religaresecurities.com/Mutual_Fund.asp |
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| 7. Can I approach any member for placing order on MFSS? |
| Only Trading Members who have obtained AMFI Registration Number (ARN) from
Association of Mutual Funds of India (AMFI) are eligible to participate in MFSS. Further, eligible members also have to register as distributor with the Mutual Fund Company. Hence, eligible members would be able to place orders only in respect of Mutual Fund Companies where they have registered as distributor. Investors of Religare can place orders through Religare.
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| 8. Are there specific timings when MFSS orders could be placed? |
| MFSS would be available for placing of orders between 9.00 am and 3.00 pm on all the working days of the Exchange. Any order placed beyond these timings could be for placing it on the MFSS the next day. |
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| 9. If I already have an existing Trading Account, what is the additional documentary requirement for MFSS? |
| If you are already using the services of NSE member for your other investment needs and you already hold units of one or more mutual fund, member would require you to sign up a authorization letter consenting to participate on MFSS. Thereafter, you could place subscription/redemption order by meeting the requirements applicable for placing such order. |
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| 10. I have so far not invested in mutual funds. What are the KYC requirements for a Mutual Fund Investor?
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Every investor investing more than Rs.50,000 in mutual fund has to necessarily complete KYC
process. If you invest in Mutual Fund through MFSS then KYC done for demat account is sufficient for Mutual Fund investment also.
For more details on KYC visit AMFI site:
http://www.amfiindia.com/showhtml.aspx?page=kyc
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| 11. Should mutual fund units be held in physical form or demat form? |
| Investors have a choice of holding units either in physical form or in demat. However, for convenience of operations and ease of entry and exit it would be advisable to hold the units in demat form. |
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| 12. For the purpose of holding units in demat account, is there a requirement of opening a separate demat account? |
| If you already have an existing demat account say for holding of your securities, same account can be used for holding units in demat form also. |
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| 13. After I provide the member with all particulars along with required documents for registering me as a client would I get any ID or code allotted? |
| After receiving complete particulars from you, member would allot a Unique Client Code (UCC) to you and report all the details to Exchange by way of UCC Upload. This UCC would form an important reference point for you. Member may allot same UCC as in Equity/F&O or allot a different UCC for MFSS. |
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| 14. When I wish to subscribe for a mutual fund through MFSS, what are the details I need to give to the Member for placing of order? |
| For placing a subscription order, you would need to give the name of the Mutual Fund, Name of the Scheme, the value (i.e. money) that you intend investing. |
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| 15. At the time of placing order if I make a mistake in giving details would I be in a position to correct or modify the order? |
| Orders can be placed between 9.00 am to 3.00 pm. Within this time period, you would able to request your member for correction of mistake if any including cancellation of order or placing a fresh order altogether. |
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| 16. What will be the number of units that I would get for the value that I decided to invest? |
| For all orders received up to 3.00 p.m Net Asset Value (NAV) of the business day will be the rate at which units would be allotted to you. Illustratively if you invested Rs. 1 Lakh, NAV of the scheme is say Rs.10/- you would get 10000 units allotted to you. |
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| 17. For subscription, how should I make payment? |
| For subscribing to Mutual funds through MFSS, you need to make payment in favour of the Member necessarily through cheque/Demand Draft. Member is obliged to place order only when clear balance from your end is available in Member's account. |
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| 18. When and how I would get credit of units to my demat account ? |
| AMC/Mutual Fund/RTA would process the subscription request and credit units to your demat account by T+1 end of the day. |
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| 19. Once my subscription order is placed on the MFSS, what confirmation would I get from my Member? |
| Immediately on placing of order on MFSS, Member would be in a position to confirm the details of order to the investor. By end of the day member would be able to issue transaction confirmation memo containing particulars like Mutual Fund, Scheme, value of subscription, Physical/demat mode, brokerage and service tax applicable. In cases of rejection of the order, reason for rejection would also be communicated by the member. |
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| 20. What are the particulars that I need to provide the member while placing redemption order? |
| At the time of placing order for redemption in respect of demat units, you need to mention name of the Mutual Fund, Scheme, and Number of Units to be redeemed. |
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| 21. Once my redemption order is placed on MFSS, what confirmation would I get from the member? |
| Immediately on placing of order on MFSS, Member would be in a position to confirm the details of order to the investor. By end of the day member would be able to issue transaction confirmation memo containing particulars like Mutual Fund, Scheme, value of subscription, Physical/demat mode, brokerage and service tax applicable. In cases of rejection of the order, reason for rejection would also be communicated by the member. |
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| 22. In case of redemption of units in demat form, to whom and how should I transfer units? |
| In respect of redemption of units in demat form, you should transfer units to the pool account of "National Securities Clearing Corporation (NSCCL)". You should ensure that you have given appropriate delivery instruction to your Depository participant and that you also ensure that units have been transferred to NSCCL account before the scheduled settlement time of 3.30pm.
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| 23. When and how would I get redemption proceeds after transferring the units to NSCCL? |
| NSCCL on T+1 day at the specified time would transfer units in its pool account to the concerned AMC/RTA's pool account. Thereafter AMC/RTA would process the redemption request at Transaction day's NAV and directly credit the proceeds to investors' bank account. |
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| 24. What are the charges that I need to pay for utilizing the services of a Member for placing orders on MFSS? |
| There are no regulatory restrictions on the fees to be charged by the member for services rendered on MFSS. However, investor and the member may mutually agree on the commission/brokerage for services rendered on MFSS and it would be advisable to agree to terms of charges in writing. Service tax would be applicable on charges so levied by the Member. |
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| 25. If I need to intimate changes to my personal information, should I intimate through my member? |
| Changes to personal information would have to be directly informed to the concerned Depository participant where the demat account is held . MFSS as a system can be used only for subscription or redemption. |
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26.(a) If I have paid my money for subscription but not received units to my credit , or
(b) if there is significant delay in placing of my orders despite availability of clear balance which has impact on units allotment price whom should I approach for resolution of my grievance ?
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| Investor can approach investor services cell of the Exchange for resolution of dispute relating to service rendered by the broker. |
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| 27. Are there any restrictions on maximum value or quantity for a single order on MFSS? |
| In case of demat transactions the maximum value of subscription or redemption for a single order is pegged at Rs. 1 Crore and there is no restriction on number of orders that can be placed. However, with reference to redemption of physical units a maximum limit of Rs.1,00,000/- per order has been kept. |
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