Investing in mutual funds for minors? Check the new Sebi rules

Transactions from only one bank account
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Transactions from only one bank account

Sebi has asked the mutual fund houses to accept payments only from the bank account of the minor or from a joint account of the minor with the guardian. Cheques, demand drafts etc would be accepted only from the mentioned bank accounts, Sebi circular said.

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When the minor is 18+
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When the minor is 18+

Sebi has directed AMCs to make sure that when the minor in whose name the investment was made, turns 18, he/she shall be required to provide all the KYC details. No further transactions will be allowed till the status of the minor is changed to major on the documents.

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Stop SIPs when minor turns 18
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Stop SIPs when minor turns 18

Sebi has directed AMCs to build a system control at the account set up stage of Systematic Investment Plan (SIP), Systematic Transfer Plan (STP) and Systematic Withdrawal Plan (SWP) on the basis of which, the standing instruction is suspended when the minor attains majority, till the status is changed to major.

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Process for transmission of units
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Process for transmission of units

To improve the processing time for transmission requests, AMCs have been directed to implement image based processing wherever the claimant is a nominee or a joint holder in the investor folio. Sebi has also asked AMCs to have a dedicated central help desk carrying relevant information.

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No redemption till transmission of units
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No redemption till transmission of units

Sebi has asked AMCs to not accept any redemption request from a claimant pending completion of the transmission of units in his / her favour.

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