 "Mutual fund investment platforms face ire over delay in unit allotment")
Several investors wanting to invest in mutual fund (MF) schemes, amid the selloff in the market on Tuesday, were left in the lurch as online MF investment platforms failed to execute the transactions on time.
According to officials at discount brokerage firms Groww and Zerodha, many of the transactions could not be processed for the same day net asset value (NAV) even though they were executed before the 2 pm deadline.
These investors were allocated the next day's higher NAV, leading to notional losses. The NAVs of equity MFs went up between 2 per cent and 5 per cent on Wednesday as the equity market rebounded from Tuesday's lows.
Several investors have taken to social media in the past two days to voice their grievances. They are also demanding compensation from the investment platforms.
Zerodha's MF investment platform Coin said the transactions got delayed due to issues with one of its payment aggregators.
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"We work with multiple payment aggregators and one of them faced issues on Tuesday. Even after pointing out the problem on time, it could not be fixed. As we work with multiple payment aggregators, only a small percentage of the transactions were affected," said Neelesh Verma, product head and assistant vice-president (AVP), Coin by Zerodha.
Groww said the issue was due to delays in money movement amid a spike in transactions.
"On June 4, some MF customers experienced delayed MF unit allocation due to the delayed money movement between banks, exchanges, and AMCs. Before Sebi’s regulations in July 2022, brokers/MF distributors used to move money for MF investment orders to the exchange. After Sebi's new regulations on the MF non-pool were implemented, payments are directly moved to the exchange, and then to AMCs without the broker/distributor. We are working closely with our ecosystem partners to address these concerns and foster a better customer experience," said a Groww spokesperson.