Coin by Zerodha and Groww Decline Execution Only Platform Mode
“In a significant move, leading mutual fund investment platforms in India, Coin by Zerodha and Groww, opt to continue with their current broking licenses, steering clear of the Execution Only Platform (EOP) framework introduced by SEBI.”
“Execution Only Platforms (EOPs), a recent innovation in India’s mutual fund landscape, are facing reluctance from major players. The country’s top direct plan platforms, Coin by Zerodha and Groww, have chosen not to transition to this new model.
Coin by Zerodha, under the leadership of Neelesh Verma, AVP and Product Head, prioritizes smooth operations with their existing broking license. Verma asserts their exemption from EOP regulations, citing confirmation from a leading exchange platform that mutual funds offered in demat form can continue under existing licenses.
Similarly, a senior official at Groww highlights their commitment to free services for direct mutual fund investments, thus opting out of the EOP model to maintain business continuity.
This industry trend follows SEBI’s introduction of two categories for EOPs in June. Category 1 EOPs can act as AMCs’ agents, while Category 2 EOPs represent investors, with both requiring distinct licensing. SEBI’s definition of EOPs encompasses digital platforms facilitating various transactions in mutual funds’ direct plans.
While SEBI mandated all direct plan Mutual fund distributors to obtain EOP licenses by December 2023, RIAs and brokers are exempt from this requirement. This regulatory environment and the decisions by Coin by Zerodha and Groww reflect a cautious approach towards embracing new digital frameworks in the mutual fund sector.”
Ganesh Kumar
https://finplay.in/Mutual Fund Expert and Stock Market Enthusiast. Indian Stock Markets to the Moon 🚀