Discontinuation of usage of pool accounts for transactions in units of Mutual Funds on the Stock Exchange Platforms

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....nge Platforms 1. SEBI, vide circular SEBI/IMD/CIR No.11/183204/2009 dated November 13, 2009 and circular CIR/IMD/DF/17/2010 dated November 9, 2010, permitted units of mutual fund schemes to be transacted through registered stock brokers and clearing members respectively, by using stock exchange infrastructure. Presently, funds and / or units of the mutual fund schemes move through stock brokers' / clearing members' pool accounts in an aggregate manner to client account or Clearing Corporation/ AMC account, as the case may be. 2. In addition to the above, SEBI, vide circular CIR/MRD/DSA/32/2013 dated October 04, 2013 and circular SEBI/HO/MRD/DSA/CIR/P/2016/113 dated October 19, 2016, allowed Mutual Fund Distributors ('MFDs') and Invest....

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....s / clearing members facilitating mutual fund transactions shall: i. not accept mandates for SIPs or Lumpsum transactions in their name; ii. accept cheque payments from investors issued in favor of the respective SEBI recognized Clearing Corporations or mutual fund scheme(s) only; iii. not accept or handle funds or units of investors in their proprietary accounts or pool accounts in any form or manner; and iv. not accept payment through one-time mandate or issuance of mandates/ instruments in their name for mutual fund transactions. However, one-time mandates in favour of SEBI recognized Clearing Corporations may be accepted. 5. The onus of compliance with PMLA provisions and not permitting transaction....

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....ers at relevant stage of the transaction in a secured environment, sharing of relevant information with concerned entities to perform functional, tax and regulatory obligations, etc. All the concerned intermediaries shall comply with the aforesaid Operating Guidelines. 8. It is reiterated that in terms of Regulation 4 (g) of SEBI (Investment Advisers) Regulations, 2013, stock brokers are required to comply with general obligations and responsibilities specified in Chapter III of SEBI (Investment Advisers) Regulations, 2013, which, inter-alia, provide that client level segregation of advisory and distribution activities needs to be ensured at the entity and group level. 9. Stock Exchanges and Depositories are directed to bring the prov....