Today on reading the value research online website, I was taken back. Just wondering how come Mfs are traded in Stock exchange, Here we suggest schemes and customer pays the AMC in that scheme name. when client wants to redeem the AMC pays back to the client.
In value research website they say the client pays in favour of the broker & units are alloted to him when client wants to sell MF he has to go back to the stock broker & Sell. My doubt is where does the AMC come in to the picture.
Example 1: Listed Franklin Capital protection Fund First Client paid to the AMC units was alloted in Demat when he wanted to sell the client goes to Stock Broker a new client buys the same Fund he pays money to Stock exchange which in turn is given back to our client. Finally on the maturity date AMC takes detail from Stock Exchange pays back to the last investor.
Would any one of u pls clarify me on this regard.
Regards,
Alagappan
9841055577
Dear Mr. Algappan,
ReplyDeleteThe process of investing in mutual funds through the MFSS plat form on NSE/BSE is as good as that of using a online platform of a mutual fund. But only difference is the cheque should favor the Stock Broker. Otherwise the allotment is same as that of a normal mutual fund investment. There is no trading of units allotted, the purchase and redemption of units are normal like any other mutual fund units bought and sold at NAV's pertaining to that day with cut off time same as that of mutual funds.
Only Exchange traded funds are listed in the stock market and they get traded. Investors can buy and sell ETF's through the exchange
the price discovery process are market related.
Hope I was able to throw some light on your query.
Regards
Srinivasan S
MONEY KARE
At Money Kare,
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Dear Mr. Srinivasan,
ReplyDeleteObviously they want to promote the stock brokers for the sale of MF Units and the restriction of third Party cheques do not apply to the purchase thro' Stock Brokers.
Today nobody has the time to wait to collect a Demand Draft and then get a certificate that the funds for the draft came from the account of the holder and send to the AMC or their agents.
Somebody who wants to take advantage of the market lows to buy, will be severely handicapped if he wants to invest in his existing folio, whereas even at 1459 hours he can call his broker and buy any amount and pay from anybody's bank account. This is SEBI's level playing field!!
We know from before, where SEBI is pushing the investors to buy thier MF units.
We did not know the AMCs are also hand in glove with them.
God help the IFAs.
Regards
Santhana
the point is valid.
ReplyDeletewill u please enlighten me on the following doubts:-
1.the mf is traded in the market which means the amc do not have to pay the redemption amount to the clients thus the fear of fall of nav will not come at all due th heavy sale of shares by the amc nor they need to keep cash portion all the time.
2.the mf is traded in the market thro the brokers, how the nav is being calculated by the amc everyday when there is no physicl redemption or purchase from them by the clients ?
3. thirdly, the sebi for crying that the distributors were fooling the public and making them sell and purchase the mf for commission purpose(which definitely is not the case except some stray instances). here the broker will be doing the same thing to get the brokerage as they do for the share by giving call to clients for ten shares out of which 4will gain
and remaining will loose.
will anybody tell me the brokerage charged for mf transaction and the services charges etc also applicable.
r.rajagopalan
dear mr alagappan
ReplyDeletegreetings
your doubt is 100% correct but what to do sebi always act like this manner it is doing all the unwanted things but shut its eyes where it really wants to act and sleeps for years together so plz don't get agitated take few antacid tablets so that you can control your acidity take care
regards
varadarajan
Dear Friends,
ReplyDeleteThis clearly Indicates SEBI Allowing 3rd party ( Stock Broker) payments.
Regards,
Alagappan