Mutual Funds
by 5paisa Research Team Last Updated: 2023-07-04T13:06:27+05:30

Registrar and Transfer agents or RTA assist mutual fund companies in getting the record maintenance. In short, RTAs offer investors a reference for mutual fund investment-based information. The private firms are registered with the Sebi or Securities and Exchange Board of India.

An Introduction to RTA: What is it?

So, what are registrar and transfer agents? Simply put, RTAs can keep track of investors' transactions in mutual funds, including these types:

●    Buying
●    Redeeming
●    Switching in or out
●    Updating personal information
●    Changing bank mandates and more

These RTAs remain equipped with skilled and professional maintenance of investors & AMC data. Investors may find transactions under a single organisation even when they have invested with different AMCs. The network is spread around the country. With online services and digital investments doing their rounds, one can easily access RTA services from anywhere in the nation.

Role of registrar and transfer agent (H2)

Do you know the role of registrar and transfer agents in India? Well, the prime role is to keep track of the transactions of investors in mutual funds. They include several types of transactions, like redeeming, switching in or out, and buying an investment.

They make individuals change their bank mandates and update personal information. Transactions of investors are easily maintained by one company. Note that investments might be made with different AMCs, and most RTAs have a wide network around the country. You can get the services available online.

Services to AMC (H2)

Considering the services, RTAs share compliance risk management, sales, and marketing with asset management companies. Note that the RTAs handle investor & distribution services and specific operations. The asset management companies choose an RTA owing to the record keeping.

Examples of the registrar & transfer agents:

One quick note: There are more than 200 RTAs on the CDSL website and a minimum of 100 RTAs on NSDL. One may find a registrar and transfer agent list on NSDL and CDSL's websites. Note that the CAMS & Karvy are the most well-known RTAs considering the Indian market.

Services to Mutual Fund Investors: 

Here's a brief on the services to mutual fund investors:
Investment & transactions: RTAs provide services via portals. The platform allows investors to seamlessly transact with mutual fund companies. Additionally, one may also invest in NFO or alternatively transact with the registered MF company via an RTA

Statement Generation: The agent can generate various statements, including CAS, a single folio's transaction details, gains statements, and portfolio valuation statements. Investors may study statements and review portfolios of the mutual fund accordingly. 

The investor may also place these things with the RTA:
●    Changes made in the bank mandate
●    Stoppage request or cancellation of any ongoing STP, SWP, or SIP
●    Nomination form
●    Consolidation of investor folios under one single folio
●    Record updation of minor to major for individuals (change in tax details, guardian,  or update investor name)
●    Central Know Your Customer for KYC forms 
●    Redemption

In addition to that, it offers services to mutual fund distributors too. Put simply, RTA offers services to the MF distributors to help distributors sell & buy funds on behalf of an investor.
MF distributors can submit digital application forms. They are scanned copies prepared via the scanner. The agents do not require physically reaching an office. Today, the same day's NAV applies when an investor applies before the given cut-off time.

Agents may generate sales reports within a specific duration. Details are considered monthly, yearly, or quarterly.

It goes without saying that RTAs have started processing the KYC forms for every investor. Simultaneously, they process the KYC forms for each distributor as well.

In addition, RTAs also have a network across the nation, thereby helping fund houses to mitigate expenses. In fact, they have also set up offices around different locations in India. That means the fund houses do not require opening any branches in such places.

All in all, RTAs offer electronic communication like newsletters, account statements, and other communication. And they also convey significant details to distributors and investors. 

RTA also charges the fund houses for services. The cost gets passed on to an investor as an annual cost's part charged by the MF houses. So, the overall expenses for any equity fund are around 10 bps.
Note that one bps is one-hundredth of the percentage point. And it's about 5 to 7 bps 3 to 4 bps for debt and liquid funds respectively.

Services to AIF Investors

Mostly all RTAs provide services to AIFs and PMS. Here is a list of the services:
●    Investor servicing
●    KYC
●    Value-added services
●    Fund accounting
●    Knowledge & technology partner
●    Document management services
●    Pre-launch support

What is AIF?

Simply put, AIF is a privately pooled investment vehicle. Its key purpose is to act as a fund. The prime function is to collect funds from sophisticated foreign and Indian investors. In addition, AIFs get governed by the Securities and Exchange Board or Sebi.

They are meant for educated and decent investors since the investment techniques, risks associated, and minimum investment requirement are quite. They get organised in the form of limited liability partnerships, or better known as LLPs.

What is PMS?

Now, what is PMS and how does it work? Although it works as a mutual fund, the prime difference is that Portfolio Management Service is a customised portfolio of stocks. Here, you can own stocks. On the other hand, the units in mutual funds are a representation of stocks in a portfolio. Truth be told, PMS helps you decide the stock;s weightage too.

So, this post compiles everything related to RTAs. You have learned the registrar and transfer agent (RTA) role, services to mutual fund investors, AIF investors, and more.

List of AMC's in India

Here's the list of top AMCs in India:
●    Axis Mutual Fund
●    BOI Axa Mutual Fund
●    PGIM India Mutual Fund
●    Kotak Mutual Fund
●    HDFC Mutual Fund
●    Sundaram Mutual Fund
●    Union Mutual Fund
●    LIC Mutual Fund
●    Nippon Mutual Fund
●    Aditya Birla Sunlife Mutual Fund
●    ICICI Prudential Mutual Fund
●    Mahindra Mutual Fund
●    Baroda Mutual Fund
●    SBI Mutual Fund
●    Navi Mutual Fund
●    Edelweiss Mutual Fund

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Frequently Asked Questions

The prime role of any transfer agent is to issue & cancel certificates. They reflect changes in ownership of an entity's securities. And they act as a company's intermediary. On the other hand, the prime responsibility of a registrar is to maintain an issuer's register for every issue of securities.

The RTA agent is an organisation offering registrar & transfer agent services associated with mutual funds. Simply put, RTA agents play a significant role in administering and managing mutual funds. They ensure the mutual fund gets managed with regard to regulations and a fund's terms.

An RTA agent administers and manages the mutual funds. In addition, they also ensure the mutual fund is managed considering the regulations and terms of funds.

Portfolio Management Service, or PMS, is a customised portfolio of stocks where you may own stocks. In addition, PMS allows you to make decisions about the weightage of stocks.

You can find over 200 RTAs on CDSL's official website. Also, there are 100 RTAs available on NSDL. Find a list of registrar & transfer agents on NSDL and CDSL's official websites.

Transfer agents are the ones responsible for managing any transfer of securities. On the other hand, custodians can safeguard assets & manage the cash balances accordingly.