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Who are RTA Service Providers in MF and their Role

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SAG RTA
Who are RTA Service Providers in MF and their Role

What does the term RTA in Mutual Fund means?

The term RTA points out to Registrar and Transfer agent these are the companies enrolled within the securities and exchange board of India (SEBI). RTA executes the record maintenance in the mutual fund companies. They act as a single-window reference towards the investors. The outcome is that they can collect all the mutual funds concerned with the investment information from RTAs.

A registrar & share transfer agent (RTA) acts as the mediator or agent between investors and mutual fund houses. These financial institutions choose RTAs to handle and maintain proper records of investors’ data. R&T Agents maintain proper records of important investor data like account balances and transactions.

In India, some of the RTA service providers SEBI Approved and Registrar and Share Transfer Agent are SAG RTA, 3i Infotech Ltd., CAMS (Computer Age Management Services), and Karvy. They provide RTA services to financial institutions, mutual fund companies, and investors.

Role of an RTA in Mutual Fund

The major role of RTAs is monitoring the investor’s transactions in the mutual funds. It consists of various kinds of transactions like buying, redeeming, and switching in or out of the investment.

They indeed assist the people to amend the bank essentials and update their personal details. To keep the investor and AMC data in a safe and secure position the RTAs are equipped with professional skills. The complete transactions of an investor will get handled by one firm.

Registrar and Transfer Agents Furnish the Services

Registrars and transfer agents provide their services to AMCs as well as investors.

To Mutual Fund Investors

Investment and transactions:- RTAs provide their services via portals. Their platform enables investors to transact with mutual fund firms. You can invest in NFO or transact with an enrolled Mutual Fund company through an RTA.

Statement Generation:- An R&T agent generates distinct kinds of statements like CAS, portfolio valuation statements, information-related transactions of a single folio, and gains statements. An investor can study these statements to review their mutual fund portfolio.

An investor can indeed put the mentioned service requests through RTA like:

  • Revocation or refusal of the request of an ongoing SIP, STP or SWP
  • Revision in bank essentials
  • Consolidation of all investor folios below a single folio
  • Nomination form
  • Updation of records of a minor to major towards the person (amendment in the guardian, tax details, update investor name)
  • Redemption
  • CKYC (Central Know Your Customer) forms and some additional are examples of service requests.

To AIF Investors

Below are the mentioned services for AIFs and PMS that RTA used to provide:

  • Investor servicing
  • Fund accounting
  • Value-added services
  • KYC
  • Pre-launch support
  • Document management services
  • Knowledge and technology partner

For Mutual Fund Distributors

SAG RTA provides its Services to MF distributors, for buying and selling the funds they assist the distributors on the grounds of the investors. online application forms submitted by MF distributors (scanned copy made via scanner installed in the agent’s office).

Their agents are no more required to physically arrive at the R&T’s office by 3 PM. Earlier, 3 PM was the cut-off time to submit an investment application. The petitioner was subjected to the same day’s net asset value (NAV) when their application was furnished prior to the cut-off time.

The agents indeed generate the report of sales performed through them in the mentioned time. The information can be taken for any frequency under the requirement like monthly, quarterly, or yearly. A distributor can feed in his conditions on the R&T’s website to obtain the reports.

Indeed RTAs incorporated the processing i.e  Know-Your-Customer (KYC) forms for investors. In the same way, they also prepare Know-Your-Distributor forms for distributors. Some RTAs like CAMS service insurance companies too are doing the same.

For Mutual Fund Companies

Across the country, RTAs pose a stronger approach that supports the fund houses to diminish the rates.

They have developed the offices in various locations in India which points out that the fund houses do not require to open branches at such locations.

Through Annual maintenance charges (AMC) the RTAs used to furnish out electronic communication like account statements, newsletters, and other required communication. They used to tell the mandatory information to the investors as well as the distributors.

RTA charges the fund houses towards their services. The cost is then further charged to the investor in the annual Mutual fund charges.

The price towards the equity funds is approximated to 10 basis points (bps). One bps is equal to one-hundredth of a percentage point. Approximately it is 5-7 bps for debt funds and about 3-4 bps towards liquid funds.

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