The Securities and Exchange Board of India on 22nd July 2022, has proposed a framework on Execution-Only Platforms (EOP), which deals with visibility of client transactions, connectivity with AMCs, client level segregation, data sharing among stakeholders, etc.
EOPs may provide both financial services viz. purchase, redemption of mutual fund units, etc. and non-financial services viz. change of email id/contact number/bank account details, complaints, etc. Only a body corporate may be eligible to obtain registration as EOP under SEBI Regulations or as an execution platform with AMFI or to apply for limited purpose membership with Stock Exchanges. Such body corporate may or may not carry out other activities. If carrying out other activities as well, EOPs may be required to maintain an arm’s length relationship between their activities as EOPs and the other activities by providing EOP services through a separately identifiable EOP department or division
EOPs would need to be in compliance with the ‘fit and proper person’ criteria as prescribed in Schedule II of SEBI (Intermediaries) Regulations, 2008. The EOP may have the visibility of the client’s transaction data feeds from RTAs for the transactions executed through their platform. The SEBI / AMFI registration number or limited purpose membership number provided by Stock Exchanges may be used as the code to get such data from RTAs/Stock Exchanges.
The EOP may enter into a contractual agreement with AMCs or RTAs/Depositories (if so authorized by an AMC) to integrate their systems and to provide execution services in direct plans of MFs. EOPs may receive transaction-based fees only from the clients and no consideration may be received from AMCs.
Further SEBI has invited comments/ suggestions from the public on the above consultation paper which shall be addressed by email to: eop@sebi.gov.in or by post to Manaswini Mahapatra, General Manager, Investment Management Department, Securities and Exchange Board of India, SEBI Bhavan, C4-A, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051 within 12th August 2022.
