Concerns Raised by FIFA
On August 27, 2025, the Federation of Independent Financial Advisors (FIFA) raised concerns about the new mutual fund platform launched by the National Stock Exchange (NSE). FIFA, which represents mutual fund distributors, sub brokers, and independent financial advisors, wrote to the Association of Mutual Funds in India (AMFI) highlighting serious issues.
The federation warned of a major data security breach. The new system allows sub brokers to see client details of the main brokers, which was not possible earlier. FIFA pointed out that this change can put sensitive investor data at risk.
Data Security Problems
FIFA explained that the platform has not mapped clients correctly. Because of this, sub brokers can view confidential client information under the main broker accounts. This problem has made it difficult for distributors to create login IDs for sub brokers, bringing transactions to a halt.
A financial advisor and FIFA member stated that such breaches could expose key details like client names, PAN, and investment values. This increases the risk of fraudulent activities such as misuse of data, unauthorized changes, or illegal transactions.
Another problem is with Unique Client Codes (UCCs). FIFA said that after migration, some UCC records are missing important details such as gender, state, and nominee addresses. Incomplete or mismatched addresses have created compliance challenges because KYC details are not properly reflected on the platform.
Operational Issues
Apart from data security, FIFA also highlighted several operational challenges. Distributors reported that they cannot view folio details easily. Redemption orders now require manual entry of information. The platform also lacks confirmation emails for transactions.
Earlier, distributors could place multiple scheme orders in one go, but the new system restricts them to a single scheme at a time. The minimum time to start a Systematic Investment Plan (SIP) has increased from seven days to one month. These changes, according to advisors, are causing delays and missed investment opportunities.
The platform also reduced the payment link validity to 24 hours and disabled net banking for some banks. The user interface has design flaws, such as not showing amounts in words or with commas, spreading details across several pages, and restricting searches only to UCC codes instead of client names.
Communication Gaps
FIFA added that mutual fund distributors are not receiving important alerts such as SIP bounce messages, mandate registration updates, or rejection notifications. The onboarding process for non individual clients remains unclear. Joint holder transactions also lack clear authorisation steps.
According to advisors, these issues are forcing distributors to rely on manual processes like confirming transactions one by one and processing single scheme orders. They stressed that such fixes are temporary and that only NSE can provide a proper solution.
NSE’s Response
NSE stated that the new platform, NSE MF Invest, had gone through extensive testing before launch and is functioning smoothly. The exchange said the system was created to make mutual fund transactions faster and more efficient. NSE also assured that it will consider feedback from distributors to address concerns.
The exchange highlighted that within four days of the migration, the platform processed over 15.86 lakh mutual fund transactions. NSE presented this as proof that the system can handle large volumes and is reliable despite the reported issues.
Why It Matters
The challenges with the NSE mutual fund platform affect both investors and distributors. If sensitive data is exposed, investors face the risk of fraud. Missing details and incomplete KYC records create compliance problems for distributors.
Operational issues like delayed transactions, lack of alerts, and single scheme restrictions reduce efficiency and increase manual workload. This situation raises doubts about the reliability of the platform and shows the need for stronger and more secure digital systems in the mutual fund industry.
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