The Interconnected Stock Exchange of India Ltd (ISE) is in negotiations with leading private sector mutual funds, including Sun F&C, SBI Mutual Fund and Alliance Capital, to offer trading facilities in the open-ended schemes of the funds. The exchange will also start marketing initial public offers (IPOs) through its traders.
ISE will offer a window to retail investors to trade in the open-ended schemes of these funds in any part of the country through their existing brokers. This will enable private sector mutual funds to compete with mutual funds major Unit Trust of India (UTI), which enjoys easy accessibility to the investor through its extensive distribution network.
According to ISE sources, the tie-ups with the mutual funds are expected to be wrapped up within a month. "This idea was conceived to provide a cheaper and cost-effective forum to funds which do not yet have the financial muscle to set up a distribution network to match UTI's and therefore are not able to access regional investors as effectively."
Over the next six months, ISE has identified three areas it would like to move on aggressively _ a) Internet trading; b) Introducing the modified carry forward system; and c) Marketing of IPOs. For Internet trading, according to M R Mayya, chairman, ISE, "We would be looking for technology tie-ups in this direction and have already begun explo