Leading stock exchange BSE is introducing 'Paperless SIP' (systematic investment plans) that would allow mutual fund investors to make transactions through various modes of payments.
The additional feature on BSE's mutual fund platform -- StAR MF -- would allow MF distributors to register SIPs for their clients, who can pay SIP amounts through various modes, BSE said in a circular today.
However, the new facility, to be launched tomorrow, is available only for non-dematerialised transactions and for instalment of amount more than Rs 2 lakh, it added.
MF distributors have the option to register only Exchange SIP (XSIP) for their clients which allows for ECS (electronic clearing service) payment route.
XSIP, launched last year, offers the MF distributors on its StAR MF platform facility to register their client's ECS bank mandates and upon successful registration with the destination bank, to start registering SIPs for their MF customers.
Under the paperless SIP facility, the investors would receive an e-mail for all the payment modes, including direct pay, nodal account, one time mandate and cheque, after the SIP has been registered.
BSE StAR Mutual Fund has become the largest MF distributor platform in India with more than 4 lakh SIPs per month.
As per the exchange's estimate, BSE StAR Mutual Fund accounts for more than 8 per cent of traction taking place in Indian MF houses.
In 2014, capital market regulator Sebi had allowed mutual fund distributors to use the stock exchange platform for non-demat transactions as well for sale or redemption of these financial products.
The move was aimed at allowing mutual fund distributors to leverage the stock exchange platforms to expand their reach.
