NCDEX gets SEBI nod to launch mutual fund platform
What's the story
The National Commodity and Derivatives Exchange (NCDEX) has received in-principle approval from the Securities and Exchange Board of India(SEBI) for a new Mutual Fund (MF) transaction platform. The move comes as part of NCDEX's broader plan to enter the equity and equity derivatives space. The new MF platform will work independently from existing equity trading systems, allowing for a quicker rollout.
Operational details
NCCL to manage clearing and settlement
The National Commodity Clearing Limited (NCCL), a wholly-owned subsidiary of NCDEX, will handle the clearing and settlement of MF subscription and redemption orders. Dr. Arun Raste, MD and CEO of NCDEX, called the introduction of this platform "both a strategic and timely decision." He said mutual funds are an ideal starting point for new investors, adding that this move is aimed at channeling rural savings into regulated investment avenues.
Inclusion goals
Platform aims to boost financial inclusion
The proposed MF platform also seeks to drive financial inclusion by offering micro-SIPs in rural and underserved areas. This aligns with SEBI and Indian government's priorities. The platform aims to build a strong cash-market base ahead of the exchange's equity launch. It will also give existing members new business opportunities and help attract new members with a simple, high-value product that is easy to adopt and scale.
Strategic expansion
NCDEX's long-term strategy and future plans
Founded in 2003, NCDEX is a SEBI-regulated exchange focused on commodity derivatives, especially agricultural commodities. The exchange plans to expand into equities and equity derivatives as part of its long-term strategy to become a multi-segment exchange. In November this year, NCDEX got board approval for an electronic platform for mutual fund distribution.