BSE in talks to pick up stake in Amfi's MF Utilities

Asia's oldest bourse BSE is in discussion to pick up stake and form a partnership with industry body Amfi's mutual fund distribution platform MF Utilities. The proposal from BSE, which runs the leading mutual fund distributor platform StAR MF, is being looked into by a four- member panel set up by Association of Mutual Fund Industry (Amfi), sources said.

These members — Reliance MF CEO Sundeep Sikka; Birla Sunlife MF Chief Executive A Balasubramanian; Religare Invesco MF CEO Saurabh Nanavati; and Edelweiss MF Chief Executive Vikaas M Sachdeva — will work out on the modalities and evaluate the proposal. The deal is expected to reduce the cost for the mutual fund industry.

"Depending on the regulatory approval, BSE can consider taking appropriate stake in MF utility," a source said. However, a BSE spokesperson declined to comment on the development, while query sent to Amfi remain unanswered.

BSE StAR MF, which became operational for all investors in December 2009, is the largest MF distributor platform with close to 5 lakh orders being routed to mutual funds per month. The platform accounts for more than 85% of market share in both, number of orders and value of orders in exchange routed mutual fund orders in the country.  Currently, 25 of the 42 mutual fund houses are partners in MF Utilities, which has 50,000 common account numbers, 4 lakh folios and 35,000 SIPs. The other mutual fund distributor player in this space is FinNet, run by CAMS and Karvy. The rival stock exchange NSE has a 45% stake in CAMS.

Industry experts believe that the deal can create a very useful end to end platform offering direct and indirect schemes.