Modi Government to introduce Mutual Funds on Flipkart, Amazon

 

Today everyone is connected to e-commerce. For all our needs, we have a long list of e-commerce sites through which we fulfil our needs just on one click. E-commerce has made our life easy to a great extent.

Now, what else the e-commerce can surprise us with?

 

Mutual Funds!! Yes, now we all can buy mutual funds on e-commerce. Soon, Indian consumers could buy Mutual Funds online on ecommerce sites. The nation’s stock market regulator wants them to add another product to their shopping cart: mutual funds. Modi Government to introduce Mutual Funds on Flipkart, Amazon.

 

To make it easier for investors to buy mutual funds in a cost-effective manner, the Securities and Exchange Board of India (Sebi) is now looking into suggestions to allow sale of these schemes on e-commerce. The Sebi is in fast track process to allow selling of mutual funds on e-commerce websites in the next one month.

 

The Sebi is eyeing India’s booming ecommerce segment to make mutual funds schemes available to a wider section of investors at a cheaper cost. The Sebi plans to change its regulations to allow online marketplaces such as Flipkart Online Services Pvt. and Amazon.com Inc. to offer funds alongside other products, chairman U.K. Sinha said in an interview at his office in Mumbai.

 

In recent time, Mutual funds have gained popularity among Indian savers, receiving more money than they did in the preceding years. Yet just 3% of the nation’s 1.2 billion people invest in them, with majority preferring bank deposits or gold, according to the Association of Mutual Funds in India. Allowing e-commerce sites to sell funds will help money managers reach out to young investors accustomed to shopping online, providing the industry with a new distribution channel.

 

Currently, tedious processes involved in buying mutual funds make it difficult for masses to participate in this investment instrument. Buying Mutual Funds requires a Demat account, KYC details, Bank account information etc. SEBI is now coming up with new norms that aim to simplify the process of mutual fund investment and attract wider audiences. The new norms will also include implementing know-your-customer (KYC) procedures online.

 

SEBI Chairman’s stated that, “we will be able to bring about an entirely new paradigm in distribution of mutual fund products” point to the fact that we may see a complete overhaul of process.

 

In the current scenario, investors can buy mutual funds directly or through distributors or agents. Investing directly will be cheaper than going through intermediaries as customer will not require to pay fee to the distributors. Since no fees need to be paid to distributors, expense ratio gets lower in direct plans, which eventually leads to higher returns for the investors.

 

Modi Government is making easier for investors to buy mutual funds in a cost-effective manner. The Sebi is now looking into suggestions to allow sale of these schemes on e-commerce platforms.

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