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Mutual fund investors do a number of transactions, like buying, selling or switching units. They could request for a change in bank details or address. Each such request is a transaction by itself. Mutual fund houses have to maintain records of each such transaction.
Mutual fund houses may not want to invest in these processes nor would they have the skilled expertise to handle these huge transactions on a professional basis. Hence, they would want to outsource this work to an agency, which can handle these requests from investors. The registrar and transfer agents (R&T agents) help them perform this job.
An R&T agent maintains these records on behalf of the fund house, through offices across the country. Computer Age Management Services (Cams), Karvy and Deutsche Investor Services are such agents. An R&T agent has a wide network of branches across the country, helping investors get forms of fund houses, complete their transactions and even obtain their account statements. It acts as single-window system for investors.
An R&T agent also helps investors with information and details on new fund offers, dividend distributions or even maturity dates in case of FMPs (fixed maturity plans). While such details is also available from fund houses, an R&T agent is a one-stop shop for all the information. Investors can get information about various investments in different schemes of different fund houses at a single place.
From a mutual fund's perspective , R&T agents provider greater reach and help save costs. Since R&T agents have offices across the country, they also double up as branches for the mutual funds they serve and help them in their sales process. Typically, investors look to invest in different schemes of different fund houses. As per the rules of Securities and Exchange Board of India, there is a cut-off time by when the investment has to be made to be eligible for that day's NAV.
So, if an investor has to make multiple investments, he will have to approach multiple fund houses. Instead, he can use an R&T agent's services to conduct all his transactions and make the investments. The mutual fund house pays money for the services offered by the R&T agent. The charges would depend on the volume of transactions done for the mutual fund. The mutual fund, in turn, charges such expenses to the expense ratio of the fund. As an investor, while doing transactions at the R&T agents office, you do not have to pay any charges.
Source: Economic Times
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October 2, 2011
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