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:
- Ferrying pieces of paper back and forth is time-consuming and painful
- Each fund house has its own version of transaction forms and maintaining and filling those is also time-consuming and painful (and confusing)
- 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
- 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:
- 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)
- 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
- MFUOnline, on the other hand, covers all the major fund houses and definitely the few that we recommend.
- 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:
- 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
- We upload the form and a CAN is issued – this is the Common Application Number and can be used across all fund houses.
- 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
- 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).
- 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).
- 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
- 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:
- You decide you want to invest or redeem or start a SIP / STP / SWP
- You tell us about it – by email (preferred), phone call, SMS, in person
- We login online and enter the transaction according to what you told us
- You get an email and an SMS from MFUOnline with the transaction details and a link
- You click on the link and approve or reject the transaction
- You have 24 hours to do this approval or rejection
- 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).
- 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?:
- Yes and No (respectively)
- 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
- Don’t worry because:
- Well, all of the above