In today’s digital age, we invest in mutual funds using online platforms or apps. Have you ever thought about what if your mutual fund platform or App closes?
Recently there was news that the Kuvera platform was acquired by CRED. In such a situation few feel uncomfortable about such a takeover or what if the platform shut its door permanently.
Before June 2023, these platforms used to register as SEBI RIA but most of their business was just to allow investors to buy and sell mutual fund schemes on their platforms. Investment advisory was not a service that these platforms offered to their users. Hence, as there is no fee transaction between such platforms and customers, there is no protection for customers in case of any issue.
Understanding this, in June 2023, SEBI came out with a regulatory framework for execution-only platforms for facilitating transactions in direct plans of mutual funds.
As per the aforesaid SEBI circular, an entity desirous of operating as an EOP (Execution…
