 "Market regulator Sebi sets deposit norms for execution-only platforms")
Mutual fund distribution platforms registering as Category-II execution-only platforms (EOPs), under the stock broker segment, will have to maintain a ~10 lakh deposit with the stock exchange, the Securities and Exchange Board of India (Sebi) said on Friday. This is in line with the rules set for stock brokers.
According to existing regulations, stock brokers have to maintain a base minimum capital deposit with the stock exchanges.
However, entities already registered with the stock exchange under any of the segments will not have to pay the deposit again.
“For members having registration of more than one segment on the same stock exchange, the base minimum capital deposit requirement shall not be additive for such a number of segments. It shall be the highest applicable base minimum capital deposit, across various segments,” Sebi said in a circular.
Earlier this year, Sebi announced a new set of regulations tailored for mutual fund distribution platforms dealing in the commission-free 'direct' plans.
It gave such platforms two options — Category-I (as agents of asset management firms) and Category-II (as agents of investors).
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To become a Category-I EOP, they have to register with MF industry body Association of Mutual Funds in India (Amfi). For Category-II, they have to register with the stock exchanges.