Context:
The Securities and Exchange Board of India’s (Sebi) centralized fee collection mechanism (CeFCoM), introduced to safeguard investors from unregistered financial advisers and research analysts, has witnessed limited adoption nearly nine months after its launch. Despite offering a secure and auditable environment for fee payments, industry experts attribute its slow traction to its optional status, low promotion, and cost-related concerns.
Launch and Purpose
- CeFCoM was launched on 1 October 2024 and is managed by BSE Ltd. and MF Utilities India Pvt. Ltd. (MFU).
- The platform aims to create a closed, transparent ecosystem for fee collection from clients of registered investment advisers (RIAs) and research analysts (RAs), thus minimizing the role of unregistered entities.
Platform Features
- CeFCoM is a fully web-based portal with full-stack API integration.
- Supports e-mandates, ad-hoc payments, and recurring mandates, including via UPI.
- Annual subscription fee is around ₹7,499, offering advisers a consolidated dashboard to track investor payments.
Challenges in Adoption
- Optional Usage: The voluntary nature of the platform limits its uptake.
- Limited Awareness and Promotion: MFU CEO Ganesh Ram acknowledged that the system is yet to undergo major promotional campaigns to drive adoption.
- Cost Concerns: Some advisers prefer alternative platforms like ValidPay, which offer cheaper, faster UPI-based fee collections.
