BackSundaram BNP Paribas RTA business to be merged with Karvy
'Even after this sale, I expect there to be a healthy level of competition in the RTA segment,' said Sunil SubramaniamMutual Fund investors of Sundaram Asset Management Company should expect to see a change of RTA on their account statements in around 1 months’ time
PremiumOn 10th October, Sunil Subramaniam, CEO, Sundaram Asset Management Company announced the sale of the Registrar and Transfer Agent (RTA) business Sundaram BNP Paribas Fund Services Ltd to Karvy Fintech Pvt Ltd. Although the business has been sold, the company Sundaram BNP Paribas Fund Services will continue to exist. Mutual Fund investors of Sundaram Asset Management Company should expect to see a change of RTA on their account statements in around 1 months’ time.
An RTA accepts mutual fund application and redemption forms, register SIPs, maintains records and undertakes ancillary tasks such as transmission of units on the death of an investor. With the announcement there will now be only three RTAs – Computer Age Mangement Services (CAMS), Karvy Fintech and FTAMIL, owned by Franklin Templeton Asset Management (India) Pvt Ltd. However two out of the three, CAMS and Karvy dominate the market between them. FTAMIL only caters to investors of Franklin Templeton Mutual Fund. Sundaram BNP RTA also catered to only two fund houses – Sundaram AMC and BNP Paribas AMC which together account for about 2.5% of the size of the mutual fund industry.
“Even after this sale, I expect there to be a healthy level of competition in the RTA segment. There are two players, a leader and a challenger who dominate the market and between them, they will provide an adequate level of service," said Sunil Subramaniam, CEO, Sundaram Asset Management Company. “Mutual Fund investors will not be affected materially by this change. Existing RTAs do not diverge widely in the level of service," said Anant Ladha a mutual fund distributor with operations in Rajasthan.
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