Simplify Your Dematerialisation Process – Let’s Get Started!

As the MCA deadline of September 30, 2024, approaches, now is the time to leverage the benefits of Validus Fintech’s comprehensive dematerialization services.

As a SEBI-certified and Digital-First RTA, we ensure a smooth, paperless transition to dematerialized shares, removing the risks of lost or forged certificates while ensuring full compliance.

Our end-to-end dematerialization solution includes:

• ISIN Creation: Obtain a unique ISIN (International Securities Identification Number) for your company’s shares.
• Demat Account Setup: Seamless onboarding of shareholders with digital demat accounts.
• Share Dematerialization: Effortlessly convert physical shares into electronic form.
• Ongoing RTA Support: Continuous support for all your share registry and compliance needs.

Experience the ease of digital transformation with Validus Fintech. Contact us today or book a demo to see how our services can help you stay compliant and improve operational efficiency.

Empowering Mutual Fund Distribution through ONDC: FAQs and Insights

At Validus Fintech, we are committed to revolutionizing mutual fund distribution within the Open Network for Digital Commerce (ONDC). Our comprehensive solutions ensure seamless onboarding, compliance, and digital transaction services for Asset Management Companies (AMCs), helping them fully leverage the potential of ONDC. In this section, we address key FAQs about how ONDC is set to transform mutual funds, and how Validus Fintech’s services empower mutual fund providers and investors to benefit from this open and competitive ecosystem.

ONDC FAQs

1. What is ONDC?

ONDC (Open Network for Digital Commerce) is an initiative by the Indian government aimed at creating an open, unbundled, and interoperable network for digital commerce. It allows buyers and sellers to connect through multiple platforms, promoting fairness, inclusivity, and reducing dependency on a single marketplace by breaking down the e-commerce value chain into distinct roles such as seller management, logistics, and payment services. This enables a more open, accessible, and competitive digital marketplace for all participants.

2. What is the potential impact ONDC is expected to have?

ONDC is expected to revolutionize digital commerce in India by democratizing access to e-commerce for small and medium businesses. Its open, unbundled network will reduce the dominance of large platforms, increase market competition, and provide greater opportunities for small sellers. It will lower transaction costs, enhance product visibility across multiple platforms, and expand access to credit and financial services for MSMEs. Additionally, ONDC aims to boost innovation, improve customer choice, and ultimately lead to a more inclusive and efficient digital economy.

3. Who are the various participants in ONDC?

The various participants in ONDC are:

1. Buyer Network Participants: Entities providing a shopping interface (mobile app or website) for consumers to search, discover, and purchase products from sellers on the network.
2. Seller Network Participants: Entities responsible for onboarding sellers, creating digital catalogs, and managing orders on behalf of sellers.
3. Logistics Network Participants (Logistics Seller NP): Entities that provide delivery and logistics services for orders, both within the ONDC network (on-network logistics) and outside of it (off-network logistics).
4. Technology Service Providers: Entities that provide technical solutions, such as catalog management, payments, and other tools to facilitate smooth transactions across the network.

Each participant plays a specific role in the unbundled e-commerce value chain, ensuring interoperability and fair competition across the open network.

4. How is it different from Amazon.com?

ONDC differs from Amazon.com in several key ways:

1. Decentralized and Open Network: ONDC is a decentralized platform where multiple buyer, seller, and logistics participants operate independently, while Amazon is a closed, centralized marketplace that controls all aspects of buyer and seller interactions.
2. Unbundled Roles: ONDC separates roles such as buyer interface, seller management, and logistics across different participants. Amazon handles these centrally, managing everything from product listing to order fulfillment within its ecosystem.
3. Interoperability: ONDC promotes interoperability by allowing buyers to access products from multiple sellers across different platforms, whereas Amazon operates as a single platform where all transactions occur within its ecosystem.
4. Ownership of Data: ONDC gives sellers ownership of their ratings, customer details, and business data, allowing them to migrate between seller participants without losing reputation. On Amazon, sellers are tied to the platform, and their ratings and data do not carry over if they leave.
5. Lower Entry Barriers: ONDC is designed to reduce costs and barriers for small businesses by offering a more competitive, open environment, while Amazon’s structure can impose higher fees and stringent control over sellers’ margins.

In essence, ONDC is more open, decentralized, and inclusive, while Amazon.com is a centralized, controlled marketplace.

5. What is ONDC in Financial Services?

In Financial Services, ONDC (Open Network for Digital Commerce) seeks to extend its open network model to enhance access to financial products, particularly for underserved segments like MSMEs (Micro, Small, and Medium Enterprises). By integrating with financial institutions, ONDC aims to:

1. Expand Credit Access: ONDC will help bridge the $300 billion MSME credit gap by leveraging alternative data sources (e.g., transaction and GST data) for better underwriting and easier access to credit for small businesses.
2. Enable Financial Inclusion: The network is designed to connect MSMEs with over 500 lenders and insurers, allowing for more accessible and competitive financial products, such as loans, insurance, and working capital solutions.
3. Seamless Digital Transactions: ONDC will promote digital payment systems like UPI and enable new financing options, such as embedded credit at the point of sale, streamlining financial transactions.
4. Tailored Financial Products: Through ONDC, financial institutions can offer personalized, small-ticket products (e.g., invoice financing, micro-loans) suited to MSME needs, promoting their growth and sustainability.

Overall, ONDC in financial services aims to democratize access to credit, insurance, and other financial products, empowering MSMEs and promoting financial inclusion.

6. In the context of Mutual Funds, how is ONDC expected to help?

In the context of mutual funds, ONDC is expected to help by:

1. Increasing Access: ONDC will make it easier for individuals, particularly from underserved segments, to discover and access mutual funds through various buyer platforms. This expanded reach will promote financial inclusion by providing more people with investment opportunities.
2. Lowering Costs: By creating a competitive and open ecosystem, ONDC could reduce transaction and distribution costs for mutual fund providers. This, in turn, may lead to lower fees for investors, making mutual funds more attractive and accessible to a wider audience.
3. Digital Penetration: ONDC’s open network will facilitate the integration of digital platforms, allowing mutual fund providers to reach consumers directly through digital channels, increasing the share of assets under management (AUM) from online platforms.

In short, ONDC aims to democratize mutual fund access, reduce costs, and promote broader participation in financial markets.

7. What happens if I am not on ONDC?

If you are not part of ONDC, your business may miss out on significant advantages, such as the ability to tap into a growing, government-supported digital ecosystem. ONDC promotes broader access to markets, reduced transaction friction, and expanded reach through initiatives like KYC verification and UPI integration. By not participating, you risk being left behind as the digital commerce landscape evolves, missing opportunities to benefit from the democratization of financial services and the increased visibility and operational efficiency that ONDC offers.

8. What does the Seller App do in the context of Mutual Funds on ONDC?

In the context of mutual funds on ONDC, the Seller App plays a critical role as the interface between the AMC (Asset Management Company) and the ONDC network. Its key responsibilities include:

1. Onboarding Mutual Fund Providers: The Seller App converts AMC data into ONDC-compliant schemas, onboarding mutual fund providers’ catalogs onto the ONDC network.
2. Handling Search Queries: It responds to search queries from the Buyer App, ensuring the correct listing of mutual fund products, making them available for investor selection.
3. Managing Transactions: The Seller App ensures that purchase, redemption, or SIP (Systematic Investment Plan) transactions are valid and comply with both AMC and ONDC rules. It also verifies the investor’s KYC and performs blacklist checks before proceeding with transactions.
4. Coordinating with AMC’s RTA: It interacts with the AMC’s Registrar and Transfer Agent (RTA) through APIs, ensuring the transaction details are transmitted and providing regular updates to the Buyer App based on information from the RTA.
5. Processing Payments: For purchases, the Seller App manages payments through various methods such as UPI, Net Banking, and eNACH, ensuring smooth payment processing.

In summary, the Seller App acts as a bridge between AMCs and ONDC, managing the entire process from catalog listing to transaction completion and compliance, ensuring a seamless experience for mutual fund investors.

9. What is the role of Validus Fintech in ONDC?

Validus Fintech plays a critical role in ONDC by acting as a marketplace seller node that helps Asset Management Companies (AMCs) onboard onto the ONDC network. With its deep expertise in the registrar and transfer agency (RTA) business, spanning over 30 years and supported by 120 full manuals, Validus Fintech provides the necessary infrastructure, compliance, and reporting tools to make this onboarding process seamless.

Key roles of Validus Fintech in ONDC include:

1. Onboarding AMCs: Validus Fintech ensures that AMCs are able to join the ONDC network efficiently by converting their data into ONDC-compliant formats and ensuring regulatory compliance.
2. Providing Advanced Solutions: With an end-to-end RTA platform and advanced technology, Validus Fintech offers API-driven solutions that support seamless mutual fund distribution, transaction processing, and reporting for AMCs.
3. Enhancing Efficiency: By integrating with both the Seller App for AMCs and the Buyer App for end distributors, Validus Fintech improves operational efficiency, enabling better analytics, transparency, and automation throughout the distribution process.
4. Supporting Investors and Distributors: Validus Fintech enhances the mutual fund distribution experience by offering tools such as automation, CRM, and workflows, which help mutual fund distributors interact with investors more effectively. It ensures investors have easy access to information, making investment decisions smoother and more transparent.

In summary, Validus Fintech is a key enabler of AMC participation in ONDC, offering robust, future-ready solutions that streamline mutual fund distribution while maintaining compliance and operational excellence.

10. Can I develop a Seller App myself? Why should I choose Validus Fintech?

Yes, as an AMC, you can develop your own Seller App for ONDC, but partnering with Validus Fintech, a SEBI-registered Category 1 RTA, offers significant advantages:

1. Expertise and Deep Understanding: Validus Fintech has fully rolled out transformative solutions for mutual funds, leveraging our deep knowledge of Product, Investor, and Transaction rules. We specialize in seamless API integration with ONDC, ensuring regulatory compliance and smoother operations.
2. Buy-Side and Sell-Side Management: Our unique strength lies in the deep integration of buy and sell-side engagements, creating a seamless transaction experience across all channels, including exchanges and MFUs.
3. Comprehensive Solutions: We offer end-to-end RTA solutions covering all touchpoints in the mutual fund industry, including channel integrations (BSE/NSE/MFU), investor and distributor services, and compliance requirements.
4. Time to Market: Our ready-to-use RTA platform ensures faster onboarding of mutual fund products, reducing delays and enabling quicker access to the market.
5. Cost Efficiency: Developing in-house involves significant upfront costs and ongoing maintenance. Validus Fintech reduces total cost of ownership by offering a continuously updated platform with dedicated support.
6. Execution Ready: With over three decades of RTA focus and successful platform rollouts for both AIF and MF verticals, we ensure your Seller App is quickly and effectively launched.

By choosing Validus Fintech, you gain a faster, cost-efficient solution built on deep industry expertise, helping you maximize the potential of ONDC with less complexity and higher efficiency.