Everything you wanted to know and now you don’t need to ask.

In 2016 we embraced paperless transacting – for all those Squirrels who wanted to embrace it, that is.

We like paperless transacting because:

  1. Ferrying pieces of paper back and forth is time-consuming and painful
  2. Each fund house has its own version of transaction forms and maintaining and filling those is also time-consuming and painful (and confusing)
  3. If you need to make a change (say, add a bank account or change a nomination), you can do it in one place and one shot and the change percolates across all your holdings
  4. Too many of our Squirrels have signature mismatch issues for various reasons, which delays and sometimes prevents transacting

We’ve chosen the MF Utilities platform (MFUOnline) because:

  1. While individual fund houses have their own platforms and MyCAMS has a platform covering some funds, these are piecemeal solutions, primarily because:
    • Most Squirrels invest in multiple fund houses
    • Some serious fund houses aren’t available on the MyCAMS platform (namely, Franklin Templeton and fund houses that are with the other registrar, Karvy)
  2. So, one would have to bounce around from platform to platform and app to app to do any transacting, which kind of defeats the purpose and makes it difficult to monitor
  3. MFUOnline, on the other hand, covers all the major fund houses and definitely the few that we recommend.
  4. MFUOnline is not owned by a private party or a bit player or a third party, but is owned by the fund houses themselves and so their interest in supporting it and getting it to work seamlessly should be a given.

How does it work – setup:

  1. There’s an initial registration form that has to be signed by all folio holders. We’ll prepare that and send it to you for signing
  2. We upload the form and a CAN is issued – this is the Common Application Number and can be used across all fund houses.
  3. A CAN is unique to a combination of folio holders. So, if a husband / wife combo have some holdings with the husband first and others with the wife first and still others with either of them singly, there would be multiple CANS created: one for hubby-wife, one for wife-hubby, one for wife and one for hubby
  4. We (and the platform) keep track of these CANS, so you don’t need to (just as you don’t track your folio numbers currently).
  5. Similarly, for each of the bank accounts that you use, you register a PayEezz mandate (ok, we didn’t do that branding, but we’re stuck with it).
  6. This PayEezz mandate is in favour of MFUOnline (not us) and authorises them to debit your bank account up to a specified limit for a transaction (a purchase or a SIP).
    • You decide the limit – we recommend Rs.10 or 20 lakhs which should cover occasional bulk purchases for most. For purchases over this limit, we would go back to a cheque transaction or do multiple online transactions (preferred).
    • You can register up to 8 banks per CAN – which gives you the flexibility to transact from any of your banks easily
  7. This is a one-time exercise – CAN registration and PayEezz registration
    • You can add or remove banks later, as you like, but via a signed form, not online
    • Ditto for changing the PayEezz mandate limits

How does it work – transacting:

  1. You decide you want to invest or redeem or start a SIP / STP / SWP
  2. You tell us about it – by email (preferred), phone call, SMS, in person
  3. We login online and enter the transaction according to what you told us
  4. You get an email and an SMS from MFUOnline with the transaction details and a link
  5. You click on the link and approve or reject the transaction
  6. You have 24 hours to do this approval or rejection
  7. If you approve, the transaction is time-stamped for the time you approved it (this is relevant because if you approve after 3 pm it becomes a transaction for the next day, which would affect how your bank gets debited / credited and at what NAV the transaction happens).
  8. If you reject or if you don’t respond within 24 hours, the transaction is cancelled automatically and never goes through

Is it safe? Should I worry?:

  1. Yes and No (respectively)
  2. It’s safe – we think so because:
    • You’re in charge of deciding whether a transaction happens or not
    • Your information is with the same entities that have it already anyway – the mutual fund houses and their subsidiary, MFUOnline
    • There are no cheques (or forms) to intercept or lose or misplace
    • There are no cash transactions
    • Everything goes directly from and to your bank account/s
    • There are no signatures to mismatch or forge
    • You approve or reject a transaction using your personal device – your phone or your computer – and your email address
  3. Don’t worry because:
    • Well, all of the above