I. Diamond SIPs to add sparkle to your assets

• Indian Commodity Exchange (ICEX) recently got SEBI approval to start the world’s first diamond trading bourse.
• Diamond SIP will let investors own high quality diamonds for Rs.900 a month.
• Diamond SIP is an Indian innovation that would be first in the world.

All those Indians who thought buying diamonds was beyond their means now have a reason to cheer. They could soon own high quality diamonds by investing as little as Rs.900 a month for about two and a half years. The Indian Commodity Exchange (ICEX), which recently got SEBI approval to start the world's first diamond trading bourse, will launch a systematic investment plan(SIP) for retail buyers to acquire the precious stones.

So far, Indian investors have been able to buy mutual funds and gold funds through the SIP route. Diamond SIP is an Indian innovation that would be first in the world, exchange officials said. Under the diamond SIP scheme, the buyer has to open an account with a broker on the ICEX, complete the know-your-client (KYC) process and then deposit some money with the broker. The buyer also has to tell the broker the exact date of each month when the broker should buy the diamond (in electronic form) for the buyer.

The ICEX starting trading in diamond contracts of three different sizes — 30 cents, 50 cents and 100 cents (1 carat). Just like in stock markets, diamond contracts on this exchange will be traded in electronic form, popularly called demat. Since diamonds will be available in demat form, a buyer can buy as little as one cent of the precious stone. And the person will be able to convert the diamond held in the demat account to physical form only after s/he accumulates at least 30 cents. Similar SIPs will also be available for buying diamonds of sizes 50 cents or 1 carat. The ICEX has started mock trading on its platform and will go live later.

At current prices, a 30cent diamond costs about Rs.27,000, translating into Rs.900 for each cent of its weight. By spending about Rs.900 every month for 30 months, the SIP buyer can take possession of a physical diamond. However, the monthly SIP amount will vary according to the price of the diamond on the bourse.

In case, the buyer is unable to pay for subsequent monthly SIPs, just like shares, his holding of diamonds already bought in previous months will continue to remain in his demat account. S/he could start buying again when s/he wishes, bourse officials said. S/he is also allowed to sell the diamond on the ICEX any time during the duration of the SIP, at the prevailing market price.

The ICEX will allow trade in only natural diamonds. All stones will also be certified by global major De Beers for genuineness, quality, cut, polish, etc, according to ICEX CEO Sanjit Prasad. Malca, the world's largest courier of diamonds, is the depository and transporter for the same through its Indian arm Malca Amit.

Talking to TOI, Prasad said the ICEX's plan is to make available high quality, certified diamonds to the common man. "A retail investor can start SIPs with a nominal investment with as small as one cent of diamond. She can buy and take delivery of fixed electronic units in each expiry and hence accumulate eunits," Prasad said. "Our platform also brings in transparency via price discovery and a level playing field to all market participants."

II. Linking Aadhaar with mutual funds

After your bank accounts and phone numbers, it is time to link your mutual fund folios to your Aadhaar number. If you are a new investor, just about starting with mutual funds, this may be simpler as the information can be taken during your Know Your Customer (KYC) documentation.

For existing investors who are already invested in several folios across schemes and fund houses, you have a few options on how to go about it.

1. Get in touch with the AMC: You can directly approach the asset management company (AMC) of your mutual funds. This can be done online through their website. While some have a link on the home page itself, guiding you to the page for updating Aadhaar details, others may have the link under the customer or investor services tab. Once you are there, have your folio number and Permanent Account Number (PAN) handy. Along with this information, you may also need to enter your name, date of birth, email ID and phone number linked to Aadhaar. If there is no option online, you can call your AMC directly and request to link Aadhaar, for which you may need to fill and submit a form with all the relevant details.

2. On the RTA website: Mutual fund registrar and transfer agents (RTAs) can also facilitate this update. For example, Computer Age Management Services Pvt. Ltd (Cams), an RTA, has an online link on its home page to help you connect all the folios for fund houses serviced by it. You can access it entering your PAN, name and email ID or phone number or date of birth. Next, as on an AMC’s website, an OTP will get sent to your Aadhaar registered phone number. Once all details are provided, the RTA will share the same with the AMCs and you would receive confirmation from the fund house about this. Other RTAs such as Karvy Computershare Pvt Ltd, Franklin Templeton AMIL and Sundaram BFS will also be able to facilitate for the fund houses serviced by them.

3. Ourselves: Modalities of the process to be followed by a distributor, to update your Aadhaar via an AMC, are still being put in place. It is likely that you will be able to do this for online and physical distributors soon. However, there is no process in place yet. Ideally, you should be able to update your Aadhaar and link it to your folio number through any point of transaction including distributors. If you do not want to go about doing this work yourself, just wait till the process is ironed out for the distributors to take it on. You can seek our services by calling our telephone numbers 080-25723911/14.

What you need to watch out for while linking Aadhar with mutual funds

There could be some glitches. First, the name on your folio should match the name in your Aadhaar, else there is a chance of the request getting rejected. The Aadhaar updation is linked to each PAN holder attached to a folio. If you are a joint holder, you too may be required to furnish Aadhaar details. However, in the online process, there is no separate mention of joint holders. As of now, the updation is happening via investor approval, which means an OTPbased verification rather than a biometric one.

Whichever channel you choose to undertake for this, ensure that the link is completed by 31 December 2017. If not, there is a chance that you may not be allowed to transact on your folios.

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Disclaimer:

The views of the authors/publishers should not be construed as advice. Investors must make their own investment decisions based on their specific investment objectives and financial positions and using qualified advisors as may be necessary. Opinions expressed in various articles are not necessarily those of Wealthmax Enterprises Management Private Limited(WEMPL) or any of its directors, officers, employees and personnel. Consequently, WEMPL or any of its directors, officers, employees and personnel do not accept any responsibility for the editorial content or its accuracy, completeness or reliability and hereby disclaim any liability with regard to the same. Stock picks and mutual fund snapshots are not exhaustive and should not be construed as recommendations.