Sebi comes out with framework for execution-only platforms for investing in direct MF schemes

Sebi introduced a regulatory framework for ‘Execution Only Platforms’ for direct plans of mutual fund schemes in a bid to protect the investors dealing in such schemes. The execution-only platform allows transactions in direct plans of mutual funds without the help of distributors.

The new framework would be applicable from September 1, the Securities and Exchange Board of India (Sebi) said in its circular.

Over the past few years, direct plans of mutual fund schemes have gained traction among investors as such schemes are cheaper compared to the regular plans, which include a commission paid to distributors. This resulted in mushrooming of several online platforms that provide the facility of investing in direct plans.