Circular on Mutual Funds

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....stered Investment Advisers ('IAs') to use the infrastructure of recognized stock exchanges to purchase and redeem Mutual Fund ('MF') units on behalf of their clients. 2. MFDs, IAs, Mutual Fund Utilities ('MFU'), channel partners and other entities including online platforms ('service providers'/ 'platforms') are providing services to investors to transact in mutual fund units. It is observed that based on bilateral understanding with AMCs, a few platforms pool the clients' funds into a nodal account and subsequently transfer to AMCs either on per transaction basis or lump sum basis. 3. Based on the discussions with stakeholders and recommendations of the Mutual Fund Advisory Committee of SEBI, the following has been decided with respe....

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.... redemption, units should be directly transferred from investor's account to the mutual fund without any intermediate pooling, in both demat and non-demat modes. 3.3.5. MFDs / IAs, MFU, channel partners and other entities (including online platforms) facilitating MF transactions shall not accept payment through one-time mandate or issuance of mandates/ instruments in their name for mutual fund transactions. 3.3.6. Cheque payments from investor shall be made in favor of the respective MF Schemes only. 3.3.7. For better investor experience and faster transfer of funds, AMCs shall provide different methods of payment through RBI recognized modes of payment. 3.4. AMFI, in consultation with SEBI, shall issue g....

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....ot permitting usage of third party bank account payments continues to lie with the AMCs. 4.2. In order to ensure that the folio and source bank account belong to the same person, AMCs shall make sure that payment for MF transactions are accepted through only such modes where independent traceability of end investor can be ensured and source account details are available as audit trail without relying on any other intermediary's records. However, the investment in MF by way of cash/ through e-wallets (Prepaid Payment Instruments) shall be in compliance with SEBI Circulars dated September 13, 2012 and May 22, 2014 (for cash) and May 8, 2017 (for e-wallets), respectively. 4.3. AMCs shall ensure that payment is credited direct....