What is CAMS for mutual funds? | CAMS क्या है? | Ep. 40 #MoneyKiBaat | Hindi - YouTube

Hi Guys, I am Anmol Gupta

from the show "Money Ki Baat"

CAMS - Computer Age Management Services.

You would have come across this term if you invested in Mutual Funds

or if you follow financial news as recently CAMS IPO date was announced.

But what is CAMS? How is it related to Mutual Funds?

In today's episode, I'll answer this question.

Before that, please do hit the subscribe button so that you keep getting updates about the upcoming episodes.

All the mutual fund companies like

ICICI Prudential Mutual Fund, HDFC Mutual Fund,

Aditya Birla Sunlife Mutual Fund,

have a lot of things to manage.

First and the most important thing for them is to manage the Mutual Funds,

to decide where to invest, which investments to redeem.

It is very important and takes a lot of effort for a mutual fund company to handle multiple schemes.

The company has to appoint a specialist fund manager to manage every scheme.

They also have a research team who makes investment decisions on the basis of their study and analysis of the market

so that you make profit on the money you have invested.

Mutual Fund companies also have to run their business

like promoting their schemes through marketing,

launching various schemes in the market with different objectives

so that they can cater to the needs of various customers from different segments.

Another important function is to manage the distributors.

Like I said in my episode on "Regular vs Direct Mutual Funds",

Mutual Fund companies are product manufacturers and

distributors serve as intermediaries between Mutual Fund companies and customers.

Hence, Mutual Fund companies or AMCs also handle these distributors.

The Mutual Fund transactions which involve purchasing or redeeming a scheme,

need to be recorded and maintained properly so that nothing goes out of line.

It should not happen that you invested your money in a scheme,

and due to some error in the system of the Mutual Fund company,

your order got erased and you lost all your money.

There should not be any defect in the system of Mutual Fund companies,

because a lot of people have invested their money.

Therefore, maintaining your Mutual Fund transaction records,

receiving payments against the orders,

paying the investors on redemption,

or verifying all the orders

are very important functions of Mutual Fund companies.

These tasks require sophisticated systems and processes.

So Mutual Fund companies can handle these tasks themselves or

they can even outsource their work.

But they can outsource their work only to selective authorised companies which are known as RTAs

or Registrar of Transfer Agents.

Currently in India, there are three RTAs or Registrar of Transfer Agents

and CAMS is one of them.

Although CAMS is involved with other business segments,

primarily it has been acting as a Registrar of Transfer Agent for 20 years.

And CAMS is RTA for biggest of Mutual Fund companies

like ICICI, HDFC, Aditya Birla, SBI, etc.

Therefore, CAMS plays a crucial role in the Mutual Fund industry

as so many big companies have appointed CAMS as its RTA.

70% of total investments in Mutual Fund industry which is also known as Asset under Management is maintained through CAMS.

Now you might want to know that how does CAMS benefit from it?

Its very simple.

Mutual Fund companies pay CAMS for rendering these services

and these expenses are a part of the expense ratio of Mutual Fund schemes.

Higher the money managed, higher is the revenue generated by CAMS.

CAMS is an RTA for Mutual Fund Companies.

However, CAMS is also useful for common investors like us.

If you have invested in a Mutual Fund which is maintained through CAMS,

you can access your transaction records and perform transactions through CAMS.

CAMS also provides a consolidated statement across all your investments in different Mutual Fund companies.

If you try to get transaction records from HDFC Mutual Fund company,

it will be able to give you HDFC Mutual Fund transaction records only.

However, CAMS will be able to provide you transaction history across all Mutual Fund companies.

In fact, CAMS along with other two RTAs - KARVY and FRANKLIN have tied up together to provide complete data to the investors.

To elaborate this, if you have invested in any scheme of ICICI Mutual Fund which is managed by CAMS,

that records will be available with CAMS.

Now if you have invested in any scheme of Axis Mutual Fund, that record will be available with KARVY

as Axis Mutual Fund is managed by KARVY.

And you have also invested in a Franklin scheme which is managed by FRANKLIN.

So if you request for the data of all your transactions through CAMS,

it will pull all your transaction records from ICICI, Axis and Franklin Mutual Fund companies.

The same facility is provided by KARVY FRANKLIN too.

You can get a consolidated statement of your transactions from either of these RTAs.

As an investor, it is very convenient for us to view a consolidated statement.

I hope you understood the role of CAMS in Mutual Fund industry.

If any of your friends or family are thinking about investing in CAMS shares,

do share this video with them so that they understand CAMS before investing in it.

And do hit the subscribe button to stay updated with the upcoming episodes.

Thank You.