SIP: If you invest through a stockbroker or an online platform, it may take some more time for your money to reach your fund house from 1st April. Also, if one important thing is not done then your investment in SIP can also stop. In fact, the capital market regulator SEBI (SEBI) had announced a change in the rules in October 2021 by issuing a circular.
Rules for investing in mutual funds changing from April 1
SEBI has asked mutual fund houses to ensure that no mutual fund distributor, online platform, stockholder or investment advisor deposits investors’ money in a bank account. In fact, some distributors, online platforms etc. deposit the money of the investors in their account first and then send it to the fund houses to buy units for those investors. This change will prevent possible misuse of money. The regulator has asked the mutual fund industry to implement this change from April 1, 2022. This will bring a big change in the operation of mutual funds. However, investors may face some difficulties in the beginning.
Will your SIP also be affected?
Investors looking to invest through Systematic Investment Plans (SIPs) are also expected to be impacted by this change.
Most of the SIP investments are done by the investors signing a one-time mandate. Even though most of the mandates are in the name of the distributors, fund houses have entered into agreements with payment aggregators and distributors to ensure that the money collected through such mandates goes directly to the fund house. First the money went to the bank account of the intermediary and then the intermediary would transfer it to the bank account of the fund house.
Such SIPs will stop
A senior official of a leading fund house said, all such SIPs will be stopped where stockbrokers are offering SIP facility through investor funds held in their account. There is no place for pool accounts in the new regime.
This means that your broker may soon ask you to re-register for the SIP mandate, in which you ask a fund house or a clearing corporation of a stock exchange to withdraw money from your bank account and then transfer it directly to the mutual fund’s bank account. right to transfer.
The new SIP mandate will be signed in the name of the fund house or the clearing corporation of the exchange, depending on the arrangement of the intermediary.
What will happen in lump sum investment
lump-sum investments: Even though most investors invest through SIPs, some investors prefer lump sum investments. Even though most of the investment aspects in these schemes are expected to remain the same, the money needs to be transferred directly from your bank account to the mutual fund account. Hence your intermediary will have to make special arrangements with the fund houses to receive the payment from you.
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