Registered Stockbrokers Allowed to Sell Mutual Funds on Behalf of Clients - SEBI

SEBI Securities and Exchange Board of India announced on Friday the stockbrokers who are registered will now be allowed to sell mutual funds and undertake all required transactions on behalf of their clients post proper authorization, a move which could widen the mutual funds distribution network even further.

"The infrastructure that already exists for the secondary market transaction through the stock exchanges with its reach over 1,500 towns and cities, through over two lakh stock exchange terminals can be used for facilitating transactions in mutual fund schemes", the SEBI circular detailing the development read.

Once the development comes into full effect, stockbrokers will be eligible to act as the "official points of acceptance". To be qualified to indulge in such dealings, stockbrokers will have to clear the AMFI (Association of Mutual Funds in India) Certificate Examination and officially become Empanelled Distributors.

The development is being viewed in much positive light by many. Anil Chopra, Group CEO and Director of Bajaj Capital said, “It is a bright move by the market regulator as it will bring in more and more numbers of the retail investors in mutual funds". Although he did assert that reliance on the change too soon might disappoint and advised to employ the "wait and watch policy".

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