How to launch mutual funds in India through APIs ?
Mutual funds have emerged as a popular investment option in India. With the increasing penetration of digital technology in the country, launching mutual funds on your existing platform as an additional offering can be a new revenue stream as well as increase customer stickiness. Tarrakki is an infrastructure provider for launching mutual funds
In this blog, we understand the process of launching mutual funds through Tarrakki’s APIs
Understanding the Regulatory requirements
Launching mutual funds requires compliance with regulatory requirements set by Securities and Exchange Board of India (SEBI). To launch direct mutual fund plans, SEBI RIA license needs to be obtained by giving NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination and NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination
Upon passing the exams, you can apply for your RIA license as an individual or a non-individual (LLP, PVT LTD, Limited etc.)
While, to launch Regular plans, one needs to register with AMFI and take the NISM-Series-V-A: Mutual Fund Distributors Certification Examination. After the exam, you need to apply for an ARN code. You can apply as an individual, non-individual (LLP, PVT LTD, Limited etc). Alternatively, after getting the ARN code you can also become Tarrakki’s sub-broker. Tarrakki will provide technology and infrastructure to offer mutual funds on the partner's existing platform and also help with compliance and back- office operations.
Identifying your needs
It is crucial to identify the API providers who provide the data and functionality for mutual funds. Tarrakki provides end-to-end infrastructure to launch a wealth product. You need to identify the API providers that provide APIs for mutual fund details, transactions, transaction reconciliation, KYC, onboarding, and other mutual funds-related APIs. Tarrakki offers a single API to onboard over 42 AMCs and a single API to transact in over 3500 mutual funds. Tarrakki does all the heavy lifting on behalf of their partners. So, partners do not have to do any separate integration with CAMS/K Fintech, MF Central, Morningstar, or others in the ecosystem to launch mutual funds.
Tarrakki offers two solutions: White label and API integration to launch mutual funds
White label: In here, the screens are ready to deploy. All you need to do is place your logo and integrate the screens on your existing platform. Zero setup and no additional tech support is required here. This option is very quick and the partner can go live within less than 7 hours. In this solution, the user remains on the partner’s platform and does not have to switch platforms to start investing
API integration: In here, you need to design your own UI/UX according to the design of your existing platform and integrate with Tarrakki’s API to launch mutual funds. Even in this solution, the user journey remains constant as the user stays on partner’s platform and does not have to switch platform to start the investing journey.
Pick a solution that is best suited to your needs.
Understand your Target audience
Tarrakki offers infrastructure according to your Target audience.
Types of investors Tarrakki caters to are:
NRIs, HUF, Minors, Companies/startups/MSMEs, NRIs, HUFs and Trusts, Individuals.
Let’s look at few use cases with whom Tarrakki has partnered with:
SBNRI is an NRI focused neo-bank who wanted to launch mutual funds specifically for NRI investing. Tarrakki provides the infrastructure to SBNRI for launching mutual funds for NRIs on SBNRI’s platform. Using Tarrakki’s infrastructure SBNRI could save countless valuable operational and intellectual hours as they received a bundled solution and did not have to interact with multiple vendors or agencies like KRA/ RTA/ AMCs across the mutual fund eco-system.
Tarrakki has partnered with PiSqaure investment, an investment advisor, who was looking go digital. the company wanted to have their own digital investment platform, given that their niche in the HNI segment, one of the core requirements was to digitally enable LLP & Partnerships, NRIs, and HUFs to invest. Tarrakki had carefully designed investment onboarding and transaction stacks for all of the PiSquare’s required use cases.
Get the sandbox and Integrate with Tarrakki APIs
Next step is to get the sandbox environment where the partner can test the APIs, how the APIs work and what data the APIs need and then they integrate with Tarrakki’s APIs. Tarrakki provides well-documented API documentation with detailed instructions and code samples.
Integration with Tarrakki’s APIs helps to save significantly on technology costs as well as time as the partner can go live within less than 21 days. Tarrakki’s APIs are Highly Secure Bank Grade 256 Bit SSL Encrypted. Tarrakki also has end-to-end customer and back-office support.
Tarrakki's helps its partners to reduce development costs by 80% and go to the market 10X faster. Tarrakki has built reliable backend APIs that solve for onboarding, transactions, reconciliation, risk assessment, Common Account Statement back-end operations.
Once the front end is ready and integration with APIs is done, you are ready to go live.
In summary, launching mutual funds through APIs requires careful planning, technical expertise, and compliance with regulatory requirements. By following the steps outlined above, one can successfully launch mutual funds through APIs and provide investors with a seamless investing experience.