On 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. Even if the business will be sold the services of the sundaram PNB paribas fund will remain same as before. After this merger, the Mutual Fund investors of Sundaram Asset Management Company are expected to see a change of RTA on their account statements in next one month.
An RCA is the one which accepts the redemption forms, Registers SIPs, accepts mutual fund application, maintains records and also do some ancillary tasks.
After the announcement of this mereger, there would be three RTAs- Computer Age Mangement Services (CAMS), Karvy Fintech and FTAMIL, owned by Franklin Templeton Asset Management (India) Pvt Ltd. The two of the mentioned three are currently dominating the market which are CAMS and Karvy. 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.