MF transactions via stock exchange infrastructure allowed: SEBI

India Infoline News Service | Mumbai |

SEBI said only a MF distributor registered with AMFI and who has been permitted by the stock exchange would be eligible for this purpose

Market regulator SEBI (Securities and Exchange Board of India) on Friday allowed Mutual Funds distributors to use the infrastructure of stock exchanges for purchase and redemption of mutual fund units directly from Assets Management Companies on behalf of their clients.

"It has been decided to allow MF distributors to use recognised stock exchanges' infrastructure to purchase and redeem mutual fund units directly from Mutual Fund/AMCs on behalf of their clients," SEBI said in a circular.

However, this facility was available for stock brokers and clearing members earlier.

SEBI said only a MF distributor registered with AMFI (Association of Mutual Funds in India) and who has been permitted by the stock exchange concerned would be eligible for this purpose.

“Only a mutual fund Distributor registered with AMFI and who has been permitted by the concerned recognised stock exchange, (MF distributor) shall eligible to use recognised stock

exchanges' infrastructure to purchases and redeem mutual fund units directly from Mutual Fund/Assets Management Companies, it added.

The stock exchange would grant permission on a request made by a AMFI registered MF distributor on the basis of criteria including fee and code of conduct among others as laid down by it.

MF distributors will not handle payout and pay in of funds as well as units on behalf of investor. The stock exchange will put necessary system in place to ensure that pay in will be directly received by recognised clearing corporation and payout will be directly made to investor account. In the same manner, units shall be credited and debited directly from the demat account of investors, SEBI said.


 

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