NSE mutual fund platform: Are data security breaches on NSE’s MF platform putting investors at risk?

Mumbai: The Federation of Independent Financial Advisors (FIFA), an industry body representing mutual fund distributors, sub-brokers, and independent financial advisors, has raised concerns over the National Stock Exchange’s (NSE) mutual fund platform, citing data security breaches, operational disruptions, and missing transaction alerts that have brought some transactions to a standstill.

The platform, widely used by these intermediaries to execute clients’ mutual fund transactions, facilitates purchases, redemptions, switches, and systematic plans. In a note released on X, FIFA said client mapping has not been done correctly, with all clients under a main broker visible to sub-broker partners. The industry body called this a “serious breach of data security”, adding that in the earlier platform, client segregation was maintained.

“We are unable to provide login IDs to the sub-brokers, bringing transactions to a standstill,” the note said.

Federation of Independent Financial Advisors flagged operational issues related to folio and investor identification number (IIN) integration. It said transaction processing has been hit, causing delays for investors.

“SIP/STP/redemption/switch transactions are restricted to one scheme at a time, unlike earlier when multiple schemes were allowed under one order,” said the body. “SIP start date is permitted only after one month (earlier it was after seven days), unnecessarily delaying systematic investments.” FIFA said the validity of payment links has been reduced to 24 hours from 48 hours. ACH mandate links are also valid for only 24 hours. The reduced payment link validity could mean investors now have less time to complete their transactions.

FIFA said that intimation emails for alerts for SIP bounces, IIN changes, transaction approvals or rejections, SIP or STP renewals, mandate updates, and auto-cancellations, which were previously triggered on the mutual fund distributor’s registered ID, are no longer being sent. The industry body also highlighted several user interface and system access issues on NSE’s platform.National Stock Exchange did not respond to an email query on the matter.