PANIC GRIPPED 38-YEAR-OLD Delhi-based investor Sandeep Sethi as he frantically switched from his usual investment app to CAMS and MFCentral to verify his mutual fund (MF) holdings. His nervousness was fuelled by the recent uproar over the alleged inaccessibility of funds invested through the popular execution-only platform (EOP) Groww, which sent shockwaves through the investor community.
In June 2024, a post on X went viral, alleging financial fraud committed by Groww. The post said the user's money had been deducted but not invested in MFs, like it was supposed to have been. At 50 million, Groww is the most-downloaded EOP, and Sethi's hysteria was understandable. But Groww issued a clarification, saying it "found that the customer's account was showing an incorrect investment due to a [reconciliation] issue" and that it "deeply regrets the reporting error".
Despite the clarification, many investors who use EOPs platforms that only execute trades and do not provide any investment advice-have turned cautious now and are looking at consolidated account statements (CAS) to check their investments or are requesting consolidated statements from their service providers. However, many cannot see all of their investments because several funds have different registrars and transfer agents, or RTAs.
The Groww incident alerted investors to the potential vulnerabilities of EOPs. As a result, their confidence in such platforms is shaken.
WHAT AILS EOPs?
This story is from the 1st September 2024 edition of Business Today India.
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This story is from the 1st September 2024 edition of Business Today India.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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