From loans to locking portfolios, big changes are afoot at revamped MFCentral

The platform, which has 2.5 million users, is run by registrar and transfer agents (RTAs) – Sebi-registered firms that provide services to mutual fund companies and investors – and allows investors to buy or sell any mutual fund.

In an interview, Sreekanth Nadella, CEO of KFintech, told Mint what MFCentral has in store for retail investors and mutual fund distributors. He also explained how the platform is different from others and why it hasn’t had the success of similar apps.

What does the change mean for investors?

If you created a mandate of ₹20,000 every month on a third-party app, you could split it across various asset management companies (AMCs). But if you went to the MFCentral platform before the joint entity was formed, you had to create a separate mandate for each one. Now this issue has been fixed and investors can seamlessly transact across all funoutds under one mandate.

That’s just one part. We have lots of innovations in the pipeline for investors. For the immediate future, we are working on a solution to lock folios. Many people travel outside the country for work. Let’s say somebody is going to the UK for two years. With this feature, they can lock their folios when they’re abroad to reduce the risk of fraud or misappropriation of funds through impersonation.

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MFCentral is the only platform where you can get consolidated account statements across all AMCs. Other fintech apps usually only show the investments you made through their platform. If you’ve invested through other platforms, other forms such as demat, or through a distributor or a registered investment advisor (RIA), you may not be able to see all your investments in one place in real time. The depository participants have a consolidated account statement (CAS) but that’s not updated in real time. 

While this function already exists for investors, we are planning to introduce a similar feature for mutual fund distributors. Imagine you are a mutual fund distributor with 50 clients who have invested across 50 AMCs. At the end of the month all 50 AMCs will send you a ‘commission slip’. That’s like a pay slip, but instead of getting one every month the company gets 50 of them. We want to make life a little easier for them by consolidating them all into one CAS.

We’ve also started offering loans against mutual funds and have extended the feature to various non-banking financial companies. MFCentral makes that easy because it has the participation of both CAMS and KFintech.

There are so many such apps nowadays. What’s different about MFCentral?

MFCentral is the only platform in the world where all fund houses have come together by leveraging RTAs to allow investors to transact in all mutual fund schemes. It’s the only platform where you can do non-commercial transactions for all your mutual funds in one place. 

If you want to add a nominee, change your address, or change your mobile number across all your mutual fund investments and all AMCs, MFCentral is the only platform in the world where you can do this. 

If you see other fintech apps offering this service, its because they are simply taking the order and routing it through us using APIs, which we resolve and send back. (An application programming interface or APIs is a set of rules and protocols that allows software applications to communicate with each other and share data.)

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That said, MFCentral was launched in 2021 to improve the ease of doing business for retail investors. It’s designed for ease of conducting transactions but is not an engagement platform. That’s probably why it hasn’t picked up like the popular fintech apps.

It’s not a platform where we upsell or cross-sell NFOs (new fund offers) or the latest IPOs. We don’t say ‘this fund has given this many returns and you should look into it’. We are not designed to be that way. We are neutral and dispassionate about cross-selling and are purely a transactional platform.

If you are looking for more information or advisory services, this may not be the right place for you. But if you’re an informed investor and you know exactly what you want, this platform is the place to be.

Also read: Sebi’s proposal for prompt deployment of new fund offer money can aid investors