In fast paced investment environment, publicly traded companies and financial institutions have multiple investors as well as mutual fund investors who carry out numerous transactions in a day such as buying, selling or switch of share units. Such transactions require to be recorded.
Who looks after maintaining such records for mutual fund companies as well as investors?
RTAs are the answer. RTAs are SEBI registered institutions that are set up with the purpose of recording accurate data of investors’ transactions so that mutual fund companies have convenience. RTAs are skilled with maintaining such records. This helps the investor to obtain all the transactions under one organization even if he/she has invested with different AMCs.
Examples of RTAs in India are Computer Age Management Services (CAMS), Karvy, and many others.
Key services offered by RTAs to AMCs
RTAs share the burden of sales, marketing, operations, compliance risk management, and fund administration with Asset Management Companies (AMCs). RTAs also send out electronic communication such as account statements, any other necessary information from AMC, and newsletters to investors and distributors. It also enables subscription transfer and redemption of units, handles KYC, Anti-money laundering and other regulatory requirements, and enables subscription transfer, and redemption of units.
Asset Management Company selects an RTA for their record keeping. So which RTA is your folio assigned to depends on the AMC you bought your fund from.
Services to mutual fund investors
Investments and transactions: RTAs’ platform have a few portals on their platform which enables the investors to transact or invest in NFO with mutual fund companies registered with their respective RTA.
Statement generation: The R&T agents generate different types of statements that help you understand your mutual fund portfolio better. Specific to RTA registered mutual fund companies there are statements such as transaction details statements in a single folio, portfolio valuation statements, and gains statements. CAS (Consolidated Account Statement) gives you an overview of your mutual fund holdings across different AMCs.
Service requests can also be placed by an investor with the RTA, such as:
- Cancellation of SIP/SWP/STP
- Change in bank mandate
- Nomination form
- Consolidation of all folios of an investor under one folio
- Conversion of minor to major for a person
- CKYC (Central Know Your Customer Forms)
- and a few others are examples of service requests
Service to AIF investors
- Investor services
- Paper order digitization
- Accept and execute orders
- Fund accounting
- Compliance and risk management
- Pre-launch support
- Value-added services
Who are AIF investors?
AIF (Alternative Investment Fund) is a type of investment fund in India. AIF is a fund of funds that invests in different asset classes other than bonds, stocks and cash. It pools funds from domestic and foreign investors in India and invests in private equity, venture capital, hedge funds and more. These investments are for sophisticated investors as the minimum capital requirements to invest in such funds are high.
Services to mutual fund distributors
- Buy and sell funds on investors’ behalf
- Submit application forms online – Earlier, 3 PM was the cut-off time to physically submit an online application form to avail same day’s NAV
- Generation of a sales report
With the rise of easy online investing, investor transactions are increasing. New investors starting their investing journey with mutual funds or rising transactions by the existing investors would make it tedious for mutual fund companies to process and maintain this huge database of crores of investors. This is where RTA makes it easier for the mutual fund companies as well as mutual fund investors.