A PROJECT REPORT ON MUTUAL FUNDS SERVICES SYSTEM (MFSS) CONDUCTED FOR KARVY STOCK BROKING LTD

SUBMITTED BY RAHUL M PAREKH INDIAN INSTITUTE OF PLANNING & MANAGEMENT ( IIPM)

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ACKNOWLEDGEMENT
I take immense pleasure in completing this project and submitting the summer project report. The last 60 days with KARVY STOCK BROKING LTD has been full of learning and sense of contribution toward the organization. I would like to thank KARVY STOCK BROKING LTD. for giving me an opportunity of learning and contributing through this project. I also take this opportunity to thank all those people that made this experience a memorable one. A successful project can never be prepared by the single effort of the person to whom project is assigned, but it also demand the help and guardianship of some conversant person who helped the undersigned actively or passively in the completion of successful project. During the actual project work, Mr. Samir Vora(Sales Head) has been a source of inspiration through his constant guidance; personal interest; encouragement and help. I convey my sincere thanks to him. In spite of his busy schedule he always finds time to guide me through the project. I am also grateful to Mr. Pankaj Solanky(Relationship manager)for reposing confidence in my abilities and giving me the freedom to work on my project. Last but not least, I would like to thanks all of my friends and well wishers for giving me their support during this project knowingly or unknowingly. Rahul M Parekh

EXECUTIVE SUMMARY:-

The project titled MUTUAL FUNDS FOR INDIVIDUAL INVESTORS IN INDIA being carried out for KARVY STOCK BROKING LTD. KARVY operates in various financial products and services like, Consultancy, Stock Broking, Mutual Fund, Insurance, Registrar and Transfer Agent, Research, Mapin etc. The evaluation of financial planning has been increased through decades, which is best seen in customer rise. Now a days investment of saving has assumed great importance. According to the study of the markets, it is being observed that markets are doing well in Mutual fund. In near future a proper financial planning is required to invest money in all type of financial product because there is good potential in market to invest. In this project the great emphasis is given to the investors mind in respect to investment in Mutual Fund .The needs and wants of the client is taken into consideration. I hope KARVY, MUMBAI will recognize this as well as take more references from this project report. The main objective of this project is to know the Mutual Funds for individual investors in India and also to know the investing pattern of people in different Financial Project. IT sector has been given more emphasis for the study of the project because it is the only sector where all type of Age group, Income class and different level of people are represented. After analyzing the feedback the conclusion has been made that the Indian financial market is having lots of potential customer the only thing is to give a proper guidance to the prospective customers.

COMPANY PROFILE
Karvy Stock Brocking Ltd is a member of National Stock Exchange (NSE), The Bombay Stock Exchange (BSE), and The Hyderabad Stock Exchange (HSE). Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards attaining diverse goals of the customer through varied services. Creating a plethora of opportunities for the customer by opening up investment vistas backed by research-based advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping the customer create waves in his portfolio and empowering the investor completely is the ultimate goal. It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate as a wealth management and wealth accumulation option. The difference between unpredictability and a safety anchor in the market is provided by indepth knowledge of market functioning and changing trends, planning with foresight and choosing options with care. This is what Karvy provide in their Stock Broking services. Karvy offers services that are beyond just a medium for buying and selling stocks and shares. Instead they provide services which are multi dimensional and multifocused in their scope. There are several advantages in utilizing their Stock Broking services, which are the reasons why it is one of the best in the country.

Karvy offer trading on a vast platform; National Stock Exchange, Bombay Stock Exchange and Hyderabad Stock Exchange. More importantly, they make trading safe to the maximum possible extent, by accounting for several risk factors and planning accordingly. They are assisted in this task by their in-depth research, constant feedback and sound advisory facilities. Their highly skilled research team, comprising of technical analysts as well as fundamental specialists, secure result-oriented information on market trends, market analysis and market predictions. This crucial information is given as a constant feedback to their customers, through daily reports delivered thrice daily; The Pre-session Report, where market scenario for the day is predicted, The Midsession Report, timed to arrive during lunch break , where the market forecast for the rest of the day is given and The Post-session Report, the final report for the day, where the market and the report itself is reviewed. To add to this repository of information, they publish a monthly magazine; Karvy; The Finapolis; which analyzes the latest stock market trends and takes a close look at the various investment options, and products available in the market, while a weekly report, called; Karvy Bazaar Baatein; keeps the investor more informed on the immediate trends in the stock market. In addition, their specific industry reports give comprehensive information on various industries. Besides this, they also offer special portfolio analysis packages that provide daily technical advice on scripts for successful portfolio management and provide customized advisory services to help the investors to make the right financial moves that are specifically suited to their portfolio.

Their Stock Broking services are widely networked across India, with the number of their trading terminals providing retail stock broking facilities. Their services have increasingly offered customer oriented convenience, which they provide to a spectrum of investors, high-networth or otherwise, with equal dedication and competence. But true to their spirit, this success is not their final destination, but just a platform to launch further enhanced quality services to provide investors the latest in convenient, customer-friendly stock management. Over the years they have ensured that the trust of their customers is their biggest returns. Factors such as their success in the Electronic custody business has helped build on their tradition of trust even more. Consequentially their retail client base expanded very fast. To empower the investor further they have made serious efforts to ensure that their research calls are disseminated systematically to all their stock broking clients through various delivery channels like email, chat, SMS, phone calls etc. Their foray into commodities broking has been path breaking and they are in the process of converting existing traders in commodities into the more organized mainstream of trading in commodity futures, both as a trading and risk hedging mechanism. In the future, their focus will be on the emerging businesses and to meet this objective, they have enhanced their manpower and revitalized their knowledge base with enhances focus on Futures and Options as well as the commodities business.

INTRODUCTION TO MUTUAL FUNDS Investment is the stepping stone to achieving one's financial dreams. Mutual funds offer an opportune way to long-term wealth creation. However, with more and more funds flooding the market, the task of selecting the most suitable scheme gets even more complicated. Mutual Fund Advisory Service at Karvy guides you through this maze and ensures that your investments are backed by our quality research. We, at Karvy help you to reach your goals by offering: Products of 33 AMCs Research reports (existing funds & NFOs; strategy reports etc.) Customized mutual fund portfolios. Portfolio revision (depending on changing market outlook and evolving trends) Access to online consolidated portfolio statement KARVY as Mutual Fund investment advisor While everyone dreams of a luxurious life, very few fulfill them. A luxurious life is generally linked with wealth. So, the question most people would like to know is: How do I create wealth? Or how can I get rich? It's really not that difficult to create wealth. It's just a matter of systematic planning and disciplined approach. Once you have small amounts saved up, then you can start looking into ways to use that money to create more money. Money can multiply through investments in the stock market, real estate, commodities, etc. One avenue which invests in all is mutual funds. Therefore, one of the crucial ways, people can build their core capital is by investing in a mutual fund. Once you have small amounts saved up, then you can start looking into ways to use that money to create more money. Money can multiply through investments in the stock market, real estate, commodities, etc. One avenue which invests in all is mutual funds. Therefore, one of the crucial ways, people can build their core capital is by investing in a mutual fund What is a Mutual fund? A mutual fund basically pools the money of investors, who share some common financial objective. This money is invested in capital market instruments like shares, debentures and other securities and also in Other investible avenues such as real estate, commodities etc. Income thus earned and the capital appreciation realised, are shared by its unit holders (investors) in proportion to the number of units owned by them 7

How is mutual fund investing different from investing in stock markets? The following table lists down the advantages and disadvantages associated with adopting the two approaches to investing. Investing through mutual funds Positives Investing in stock markets directly Positives

1: An investor with small amount can 1: Investor with reasonable investment invest small amount and can have surplus can pick stocks according to his exposure to large number of stocks. discretion. 2: Fund manager takes care of the 2: The right calls in the right stocks offer portfolio performance through his better returns. expertise in analyzing the company's performance and the outlook on market scenario. So the investor just has to track the fund's performance. 3: The cost of churning is low when 3: The investor can exploit the right investments are made through mutual opportunities (such as bonus/dividend, funds. selection of appropriate IPOs issues) according to his choice of time and money from the universe of stocks. 4: Investors can geographically diversify their portfolio by putting their money in funds which invest in international markets. 5: SIP approach, which is a practical tool for long-term wealth creation, can be opted in mutual funds. 6: With the usage of derivative instruments (which help limiting the downside), the investor benefits by earning higher risk-adjusted returns than the market. 7: By investing through mutual funds which invest in IPOs, retail investors can invest in a large number of IPOs, 8 4: The investor can earn higher return through future and options. But it involves higher risk compared to equity market.

for whatever amt he is ready to invest.

Short comings

Short comings

1: Investor doesn't have the freedom of 1: It doesn't offer a user-friendly getting a desired allocation to specific environment for the investment in IPOs stocks and sectors as it is decided by the due to following reasons. fund manager. The investor can't invest in large no of IPOs at the same time due to the high up front application amount.

There is a limit on the investment amount in IPOs. The investor may not be allotted the desired number of shares applied by him due to oversubscription.

2: Mutual fund investors have to shell out loads and bear the fund management fee charged by the mutual fund house and the AMC.

2: Investor has to keep a track of the market and the individual stocks as well. This whole process requires more of time, efforts and expertise. 3: To limit his downside through F&O market, investor has to pay a hefty sum as margin money. Further, F&O trading requires constant market tracking which is a very time consuming task. 4: Investing in international market might prove to be an expensive affair for retail investors. 5: Relatively high cost of , as short-term capital gains tax comes into picture.

Benefits of mutual funds Sets the investor free from four main constraints Convenience and Knowledge: The investor need not go through the tedious task of research and stock selection and need not track the market to manage the portfolio. Time: Frees one from spending his precious time to track his portfolio everyday. Complexity: Frees from the complexity involved in equity and debt markets. Diversification: Investing in mutual funds enable a well-diversified portfolio, with a very small amount of investment. Diversification across various securities lowers the risk associated with investment Higher risk-adjusted returns: Majority of equity funds have outperformed indices while other avenues like fixed deposits, post-office schemes etc. have delivered lower returns Professional management: Investors purchase funds because they do not have time or expertise to manage their own portfolio. A mutual fund is relatively an inexpensive way for a small investor to get a full-time manager to create and monitor his portfolio. Low entry barrier: Any investor can invest in mutual funds. He need not open a broking or a demat account to invest in mutual funds. Further, investment can be made in mutual funds with an amount as low as Rs. 500 Liquidity: Easy and fast redemption leads to high liquidity. Also, one can enter and exit the fund (open-ended) depending on his discretion Transparency: The transparency levels are very high in this industry. Investors can view his fund's NAV on a daily basis. Also, majority of the funds disclose their portfolio holdings on a monthly basis Tax-saving: Mutual funds are exempted from capital gains arising out of portfolio churning. If an investor shifts his holdings, he will have to pay these taxes. Thus, mutual funds are a costefficient way of portfolio management. Also, there are ELSS funds (tax saving funds) which help availing the benefit of tax-saving u/s 80C. As compared to other tax saving avenues, they have lowest lock-in period and also offer higher return potential

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Innovative schemes to suit unique needs of different investors: There are schemes that offer international diversification to reduce the geographical risk. There are derivative funds which adopt various derivative strategies to gain from the either side movement of the market. Capital protection funds offer a unique feature of capital protection coupled with market linked returns

CATEGORIES OF MUTUAL FUNDS In terms of ease with which investors can enter and exit funds, mutual funds are broadly divided into two classes:

Open-ended funds: Investors can buy and sell the units from the fund, at any point of time. Close-ended funds: These funds raise money from investors only once. Therefore, after the offer period, fresh investments can not be made into the fund. If the fund is listed on a stocks exchange the units can be traded like stocks (E.g., Morgan Stanley Growth Fund). Recently, most of the New Fund Offers of close-ended funds provided liquidity window on a periodic basis such as monthly or weekly. Redemption of units can be made during specified intervals. Therefore, such funds have relatively low liquidity.

There are various classes of mutual funds depending upon the nature of investments. Here are three broad classes from which one can choose to invest, depending upon his risk-return profile.

Equity funds Balanced funds Debt funds

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Equity funds These funds invest in equities and equity related instruments. With fluctuating share prices, such funds show volatile performance, even losses. However, short term fluctuations in the market, generally smoothens out in the long term, thereby offering higher returns at relatively lower volatility. At the same time, such funds can yield great capital appreciation as, historically, equities have outperformed all asset classes in the long term. Hence, investment in equity funds should be considered for a period of at least 3-5 years.

Fund classification based on capitalization focus 12

There are also funds based on capitalization which invest in companies falling within a certain segment of market capitalization. Based on capitalization, equity funds can be placed on the risk return grid as shown below

Balanced funds Their investment portfolio includes both debt and equity. As a result, on the risk-return ladder, they fall between equity and debt funds. Balanced funds are the ideal mutual funds vehicle for investors who prefer spreading their risk across various instruments. Following are balanced funds classes

Debt-oriented funds Equity-oriented funds

Debt Funds They invest only in debt instruments, and are a good option for investors averse to idea of taking risk associated with equities. Therefore, they invest exclusively in fixed-income instruments like bonds, debentures, Government of India securities; and money market instruments such as certificates of deposit (CD), commercial paper (CP) and call money. Put your money into any of these debt funds depending on your investment horizon and needs.

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MIPs Arbitrage Funds FMPs Arbitrage Funds Income Funds Floating rate funds Gilt funds Liquid funds

Risk-return grid

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Innovative funds Fund of funds A fund of funds is a mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds. Hence, it is a step ahead of mutual fund in the sense that while a mutual fund keeps a track of the stocks it invests, a fund of fund keeps track of the mutual funds it invests and hence manages the portfolio on behalf of investors. Such funds are treated as a debt-oriented fund for tax purposes Advantages Convenience Investors switch between different funds at different times, and dynamically manage their portfolio in an endeavour to achieve high risk-adjusted returns. This task of managing the mutual funds portfolio is done on their behalf by fund of funds. Instead of having different account statements for different funds, investing in a fund of fund offers the convenience of having a single consolidated account statement, while still maintaining a diversified portfolio across various schemes. Flexibility Investors can spread their money across different strategies/managers. An investor may not be able to sell off when markets fall in the direct stock market. A fund of fund can easily switch from one fund to another Cost factor For an investor, who actively manages his portfolio, cost of execution and tax impact on short term switches could be a constraint. In such a case, investment in a fund of fund could prove to be an efficient route Disadvantages Fee structure Expense fees on fund of funds are typically higher than those on regular funds because investors have to bear expenses for the main fund of fund and other funds it invests into Stock-wise portfolio tracking Since a fund of funds buys many different funds which further invest in many different stocks, it is possible for the fund of funds to own the same stock through several different funds. Thus, it may be difficult for an individual investor to keep a track of the overall stock holdings 16

Risk-return profile Its position in the risk-return grid depends on its allocation to equity and debts funds Derivative funds They invest in the derivative market which limit the downside risk by selecting hedging approach and also offer additional return through shorting procedure Advantages Limit the downside risk Derivatives are generally used for hedging purpose so that they can limit the downside risk of equities. Hence this fund will be suitable in a falling mar Higher potential in generating returns It can offer higher return through short or long positions. But this involves high risk. Disadvantages The investor has the possibility of loosing his money if the fund takes unhedged positions Risk-return profile If the fund follows only hedging procedure then it can be termed as low risk - low return category. But if it takes short positions or unhedged positions then it can fall under high-risk, high-return category Internationally diversified funds They invest in equities and equity related instruments of companies listed overseas. Advantages

Geographical diversification to investors

It provides additional diversification and flexibility to overcome country-specific factors Disadvantages It can lead to volatility if it is exposed to expensive markets like Brazil or Russia Risk-return profile It depends on the foreign market it is exposed to 17

Capital protected funds (CPFs) These funds intend to offer reasonable return while protecting the capital Trying to understand capital protection strategies using financial jargons is like cracking a puzzle. But these strategies are based on one simple formula which can be adopted by anyone. Let us consider a case where one wants to invest Rs. 100 for a period of 3 years. Assuming debt paper return of 8% p.a., one can invest Rs. 80 in such paper for three years. This will grow to Rs. 100.77 at the end of 3 years. He can use the remaining Rs. 20 to invest in other risky avenues which has the potential of generating higher returns. If the risky avenues yield favorable returns, he will receive Rs. 100 plus gains on Rs. 20 invested in risky avenues. On the other hand if he loses his entire Rs. 20, he still manages to secure Rs. 100 at the end of three years. Thus, initial investment once made in debt and equity (in the report risk-free portion will be referred as debt and risky avenue will be assumed as equity) is not changed over the life time of the fund and it remains static. Therefore, it is known as Static Asset Allocation. In one more type of capital protection strategy, the allocation to debt and equity is revised and changed periodically (daily, weekly, fortnightly or monthly). It is known as dynamic asset allocation. Multiplier: It is an implied leverage which is applied to the portfolio, which decides the risk that a portfolio can be exposed to. It generally varies from 2 to 5. Higher the multiplier, higher will be the portfolio's equity exposure in rising markets.

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SHAPE YOUR WEALTH THROUGH SIP Introduction Which ever way you choose to invest your money to create wealth, one thing is for sure, the sooner you start the better off you will be. Once your investment returns start compounding year after year, you will really start to see the effect it has on your wealth creation activities Uncertainty is the basic nature of stock markets. Time and again, the markets have proved investors wrong by showing their unpredictable nature. This impact is most crushing on retail investors. Is it possible to ride on the stock market volatility, without getting hurt? Yes, it is! For this two simple principles need to be followed religiously Stay invested for long term SIP is one approach which lets the investors follow the two basic principles of investing at one go Benefits of SIP

Monthly contribution: Investing at one go proves to be a burden on the pockets of investors. On the other hand, monthly investments in small amounts are more feasible for them. SIP provides this benefit to retail investors, wherein they can invest a part of their monthly savings regularly. The initial investment amount may be as low as Rs.500. Systematic approach: SIP helps in investing consistently in a disciplined manner and further it helps in compounding returns as well.

Rupee-cost averaging: Any market witnesses ups and downs over a period. The best investment approach to be followed in such cases is a SIP. Here, irrespective of the NAV movement an investor acquires more units compared to a one time investor. Successively, this means higher gains. The following table illustrates the same. NAV (Rs.) 10 8 10 12 Units allotted in Amount invested Units allotted in Amount invested lump sum in SIP (Rs.) SIP in lump sum investment 5000 5000 5000 5000 500.00 625.00 500.00 416.67 20 25000 2500

Month 1 2 3 4

5 Total

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5000 25000

500.00 2541.67

25000

2500

SIP approach lets the investor to buy more units when the prices are low, thereby bringing down the average cost for the investors. Timing the market approach: Consider three cases. Sehwag invests Rs.5,000 at the index level on the first day of every month. Dhoni, being lucky, invests the same amount at the lowest value of the index every month; and Kaif, unfortunately invests the same amount but at the highest level of the index during that month. Investment made BSE Sensex returns Sehwag (indifferent) 20.02% Dhoni lucky) 20.87% (most Kaif (unlucky) 19.09%

The returns in the above three cases differ by a very small margin, showing that while investing for long term, it doesn't really matter whether you are investing at market peaks or market lows Hence time in the market is more important than timing the market. Investing through SIP frees you from timing the market because over a long horizon, SIP investment evens out the market ups and downs MUTUAL FUNDS TAX PERSPECTIVE For the purpose of tax-treatment, all funds are classified as equity oriented or debt oriented funds. An equity oriented fund means a fund where investments in equity shares in domestic companies are more than 65% of the assets. If a fund is able to meet this condition, it is treated as equity oriented fund, else as debt oriented fund

Applicable tax deductions: ELSS Eligible for tax deduction u/s 80 c for an amount up to Rs. 1 lakh

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A Great Business Opportunity Of MFSS For Authorized Persons Introducing MFSS November 30, 2009 saw the introduction of a completely new concept called Mutual Fund Service System (MFSS). Starting with the equity oriented schemes, Mutual Fund schemes will now be transacted on the Stock Exchanges in India (NSE and BSE). The Required Change Mutual Fund schemes being traded on the stock exchanges, the following will be the mandatory changes: A complete change in the way Mutual Fund investment transactions in India will be organized. Change in the profile of the intermediaries involved in these transactions only authorized entities will be allowed to help the investors undertake these transactions. The concept of Business Associate for Mutual Funds will give way to a comparatively more important concept of an Authorized Person. Going forward, all of the Mutual Funds transactions at stock exchanges will be in dematerialized format with obvious benefits in form of more transparent, convenient and efficient transactions. There will be a need for a broking account and a demat account to invest in Mutual Funds in India. Mutual Fund investment transactions will be similar to direct equity investment transactions, both being traded at the stock exchanges. Hence, a Partnership with a Renowned Financial Intermediary in India, that has an existing relationship with the capital markets as a Broker as well as a Depository Participant, will become the Need of the Hour. Service Umbrella providers will be in more demand and provide a greater value than standalone service providers.

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KARVY as Your Preferred Business Partner KARVY is future ready to help you successfully deal with this big change that has just begun. The MFSS product provided through KARVY to you, will let your clients continue to invest online in Mutual Fund schemes with convenience. What's more !!! You will continue to remain in a commanding position of a preferred financial advisor and enjoy the remuneration of the good old days. You also will be able to provide your clients the facility of online investments and trading in direct equities at the stock exchanges. You will just need to sign-up as an Authorized Person with KARVY for the MFSS product. A range of benefits will follow.

MFSS Benefits to an Authorized Person No Charges / Fee is required to be paid by you for registering with KARVY as an Authorized Person for Mutual Fund investments. A Free-of-Charge Mutual Fund and Equity Online Trading Terminal will be provided by KARVY to enhance your convenience of execution of transactions either your place or at our office. You share the brokerage earned by KARVY on all MF purchase and redemption transactions of your clients is paid to you. No Charges / Fee is required to be paid by you for registering with KARVY as an Authorized Person for Mutual Fund investments. A Free-of-Charge Mutual Fund and Equity Online Trading Terminal will be provided by KARVY to enhance your convenience of execution of transactions either your place or at our office. You share the brokerage earned by KARVY on all MF purchase and redemption transactions of your clients is paid to you.

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The Additional Benefits from MFSS You Also Get to

Have a share in the brokerage received by KARVY from the AMCs in the MF investment of your clients. 75% of this brokerage is also paid to You

Have a share in the Trail Commission (paid on a quarterly basis ), if the MF AUM (Asset Under Management) from your clients, invested through the KARVY MFSS, exceeds Rs. 5,00,000/ 50% of this trail commission is paid to You

Trail Commission: An Illustration Assume the value of AUM mobilized by you based on your clients investments through KARVY MFSS, to be Rs. 5,00,000/-* as on 30th September 2009 (for the quarter ended 30th September 2009). A Trail Commission of 0.50% p.a. paid (on a quarterly basis) to KARVY by an AMC on this AUM value, is calculated as Rs. 625. Rs. 312.5 (50% of this Trail Commission value) will be paid to you.

Trail Commission payment is subject to the maintenance of the minimum AUM value of Rs. 5,00,000/- for the entire previous year and also the maintenance of the average quarterly balance of AUM value of Rs. 5,00,000/The Competitive Edge: MFSS + Equity Register for the KARVY MFSS product and achieve the position of a leading Authorized Person for Mutual Funds. You can also diversify your advisory services by further enrolling with KARVY for direct equities. This opportunity will help to you to more effectively service your Mutual Fund clients by enabling their direct equity investments and trading transactions as well.

Benefits from the Equity Tie-up: 24

You will share the brokerage earned by KARVY on the direct equity investment and trading transactions of your clients, depending on the number of clients introduced by you for this service % of Brokerage paid* to you 25% 30% 40%

No. of Clients Introduced Up to 25 clients 26 clients to 50 clients 51 clients to 100 clients

Brokerage will be paid on a monthly basis

NEAT-MFSS Features The NEAT MFSS features and user navigation for MFSS are described below. For further details Participants are requested to refer to the on-line help facility. Parameters for Mutual Fund Service System. Market time 9.00 AM - 3.00 PM MFSS Segment DP Series DR GR Dividend Payout option Dividend reinvestment option Growth option

Setting up schemes in market watch The facility is available to the user to set up the schemes on the market watch screen. The user can set up the scheme individually by first pressing the [F4] key and then enters the schemes details like category, symbol and series. Alternatively the user can set up the schemes on the market watch screen through Security List. The schemes set up on market watch allow the user to: 1. View the indicative NAV (i.e. NAV of previous day) for the scheme. 2. Default the scheme descriptor while entering subscription/ redemption request thereby reducing data entry. 3. View scheme details like ISIN, limits etc. by double click on the scheme.

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Security List The facility is available to the user to list the schemes available for trading on NEAT-MF The user can search for the schemes by filtering on scheme category, symbol, series, ISIN code, scheme name, AMC code. Setting up of Client Registration: The facility is available to the user to set the client details. The user shall not be allowed to place an order for the client if registration details of the client are not maintained. The user can modify/ delete client registration already maintained subject to certain restrictions. A bulk upload facility is also available to set up client registration. DP Master A client is registered as an individual client in client registration process described above. However, depository accounts can be maintained in joint accounts. Firstly the user is required to register all joint holders for the depository account if subscription/ redemption request is to be entered with depository settlement. The facility is available to the user to maintain DP Master of the client. The user is required to provide depository ID and client beneficiary ID along with client codes. The sequence in which client codes are entered shall be the same as available for depository ID and client beneficiary ID combination. This one time set up of DP master is must if the user wishes to enter subscription/ redemption request for the client with depository settlement. Order Entry This facility is available to the user to enter the subscription and redemption order by pressing the [F1] and [F2] key respectively. The user can request following types of subscription/ redemption requests:

Physical Subscription Fresh (first time) Physical Subscription Additional Depository Subscription Fresh (first time) Depository Subscription Additional Physical Redemption

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DP Settlement The user can declare upfront whether the subscription/ redemption request would be settled in physical mode (N) or depository mode (Y). Purchase Type The user can request for fresh or additional subscription. For additional subscription in physical mode folio number would be mandatory.This field is not applicable for redemption requests. Application Number This is optional field. DP ID Beneficiary ID If the DP Settlement is Y, it is mandatory for the user to enter depository details. The user must enter depository ID and client beneficiary ID available in DP master. The client codes linked to the combination are picked up from DP master and relevant details for such clients are picked up from the client registration. FOLIO Number If the DP Settlement is N, it is mandatory to enter the folio number for additional Subscriptions and Redemption Requests. Order Amount The user is allowed to place order amount in multiples of rupees. Minimum amounts are specified at the scheme level for fresh and additional subscription. The subscription order would be rejected if the order amount is not greater than or equal to the amount specified. Similarly, maximum amount is specified at the scheme level for physical redemption. Physical redemption order would be rejected if the order amount is equal to or greater than the amount specified. No subscription/ redemption order should be entered with amount equal to or greater than Rs. 1 crore. For depository redemption order amount is not applicable. Order Quantity The user is allowed place order quantity only for redemption requests. Maximum quantity is specified at the scheme level for physical redemption. Physical redemption order would be rejected if the order quantity is equal to or greater than the amount specified.

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Client Code and mode of holding For physical subscription and redemption orders the user would enter the client code and mode of holding. The mode of holding can be Single (SI) / Joint (JO) / Anyone or Survivor (AS) For depository subscription and redemption orders the client codes would be defaulted from the depository master for the given DP ID Beneficiary ID combination. The user would not be allowed to change the default client codes. For the client code entered client name, PAN and KYC information shall be displayed from Client Registration. The user would not be allowed to change this information. For subscription request above Rs. 50,000/- KYC must be completed (Y) for all the clients entered for the order. Following additional facilities are provided along with order entry: 1. The facility to submit the bulk orders using offline order entry facility. 2. The facility to take online backups of orders entered by the user for the day. 3. The facility to print the confirmation slips either online or offline.

Outstanding Orders This facility is available to the users to view the outstanding orders in particular scheme. This information is available only for the current day. Subscription and redemption orders would be presented separately. A facility is available to modify or cancel particular order displayed in the list. Order Modification/ Cancellation This facility is available for the user to modify or cancel specific outstanding orders. This is available only during the market hours. The user would not be allowed to modify symbol, series, scheme name and depository settlement. Activity log This facility is available for the user to track order entry/ modification/ cancellation activities performed for specific scheme. Full Message Display This facility is available to the user to view interactive messages (i.e. sign on/ sign off, transaction messages like order confirmation, order modifications etc.) and market messages sent by the exchange.

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Risk Management following trading member firm level risk management features are provided along with order entry: 1. The facility is available to the corporate manager to set the limit on the total value of orders that can be entered by the specific branch within the trading members firm by specifying the branch order value limit.

2. The facility is available to the corporate manager or branch manager to set the day limit on the total value of the orders that can be entered by the specific user within the trading members firm by specifying the user order value limit.

3. The facility is available to the dealer to the set quantity / amount limits for individual orders entered by self by specifying the order limit.

MUTUAL FUND TRANSACTISION USING TRADING PLATFORM National Stock Exchange ( NSE ) Mutual Fund Service System ( MFSS ) Bombay Stock Exchange ( BSE ) BSE STAR MF Platform ( STAR MF )

WHO CAN ACT AS A PARTICIPANT? As specified vide SEBI circular SEBI/IMD/CIR No.11/183204/2009, trading members of the Exchange who are ARN holders and who have passed the AMFI certification examination will be permitted to participate (herein known as Participant) in this ELECTRONIC PLATFORM. WHO CAN INVEST? Individuals HUFs Minor ( Residents )

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HOW TO INVEST? Investor Needs to open a Client Account with the Stock Exchange Broker by filling a Client Registration Form (CRF) or existing SMC clients can do so by filling only Annexure 3.

AVAILABLE TYPES OF TRANSACTIONS. Fresh Subscriptions ( Only Lumpsum ) Additional Subscriptions ( Only Lumpsum ) Redemptions

TIMINGS FOR SUBCRICPTION & NAV. Orders can be entered on the Electronic Platform between 9:00 AM to 3:00 PM Subscription / Redemption order submitted on a given date, will get the NAV as at the end of the day for respective scheme. MODE OF TRANSACTIONS. Transactions can be executed in Physical Mode Demat Mode

SUBSCRIPTION PHYSICAL MODE The investor has to submit the following documents/details along with clear funds in our bank A/C HDFC Bank 00030340041014. Else the investor having credit balance in their trading account can also do the transaction by signing fund transfer letter to the Participant: Completed and Signed respective scheme Application Form Copy of PAN Card of first holder Copy of PAN Card of each additional holder in case of joint investment Copy of KYC acknowledgement form (in case the of investment of Rs. 50,000/- and above) of all holders Copy of Guardians PAN Card in case investment is on behalf of minor Folio No. in case the subscription is an additional purchase. 30

REDUMPTION PHYSICAL MODE The investor has to submit the following documents along with the funds to the Participant: Redemption Form duly signed with clearly mentioned folio number and scheme. The same redemption form should reach to the registrar before 4:00 p.m. on the same day. Copy of PAN Card of first unit holder Copy of PAN Card of each additional unit holder in case of joint investment Copy of Guardians PAN Card in case investment is on behalf of minor

SUBSCRIPTION DEMAT MODE The investor has to submit the following documents/details along with clear funds in our bank A/C HDFC Bank 00030340041014. Else the investor having credit balance in their trading account can also do the transaction by signing fund transfer letter to the Participant: DP Id and Beneficiary Id of his Depository Account

REDUMTION DMAT (NSE) The investor has to submit the following documents along with the redemption request to the participant . Investor will be required to transfer orders to the NSCCL pool account on the transaction day by 4:30 p.m. as an on-market transaction. NSDL & CDSL A/C holder should provide delivery instruction for crediting the units for redemption should be given by the investor to the following account:

NSDL A/C HOLDER CM BP ID CM Name ISIN Market Type Settlement Number IN565576 NSCCL .. Mutual Fund .. 31

CDSL A/C HOLDER Counter BO ID : (NSCCL House Account) 1100001100017837 Exchange Name ISIN Market Type Settlement Number NSCCL .. Mutual Fund ..

REDUMPTION DMAT(BSE) The investor has to submit the following documents along with the redemption request to the participant . Investor will be required to transfer orders to the ICCL pool account on the transaction day by 4:30 p.m. as an on-market transaction. NSDL & CDSL A/C holder should provide delivery instruction for crediting the units for redemption should be given by the investor to the following account: CDSL Demat Account No. CMBP-ID CM Name Market Type Settlement No. 1100002900000011 --------ICCL Mutual Fund As applicable NSDL --------IN 619960 ICCL Mutual Fund As applicable

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Benefits Of Trading Platform For You As An Advisor Effective time management Flexibility in transaction execution Advise large no. of investor Attractive brokerage Exciting opportunities to increase revenues Reduction of expenses (Courier, Conveyance, etc.) For Your Client Hassle-free transaction No paper work No cheque writing Any time any where All leading Mutual Funds online Online MFSS Login Process. Login Screen

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First Screen After Login In NEATMF

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Client Regestration Form

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After client Registration ADD DP-ID Details Of Clients

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Now u Can Place Order For Clients.

Available MNCs On Online MFSS Birla SL Mutual Fund HDFC Mutual Fund IDFC Mutual Fund Reliance Mutual Fund Religare Mutual Fund SBI Mutual Fund Tata Mutual Fund UTI Mutual Fund

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