How will investors benefit now that SEBI has permitted them to invest directly in mutual funds on the exchange platform?

This move by SEBI will have a big impact on the investors as it will permit them to invest in direct plans of mutual funds.

In a move to bring greater transparency to the mutual fund buying process, the regulator SEBI has permitted investors to directly purchase and redeem mutual funds from the stock exchange.

Currently, the exchange mutual fund platforms like the BSE STAR can only be accessed by brokers and Registered Investment Advisors (RIA). Now investors in mutual funds will be allowed to directly access the MF platform. The big advantage of this move is that now it would become possible for investors to buy Direct Plans also from the exchange platform.

This is not possibly currently as investors need to go through brokers and they would not encourage Direct Plans. However, with the risk of brokers retaining MF float, the regulator wants the funds to be handled by the clearing corporation off the stock exchange. However, SEBI has asked investors to use this facility prudently and not to trade in mutual funds.