Extending facility of creating standing instructions for Systematic Withdrawal Plan (SWP)/ Systematic Transfer Plan (STP) for Mutual Fund units held in demat form
Summary
SEBI extends the facility of creating standing instructions for Systematic Withdrawal Plan (SWP) and Systematic Transfer Plan (STP) to mutual fund units held in demat form. The implementation is structured in two phases, with Phase I covering unit-based mandates and Phase II covering amount-based mandates. Depositories are designated as nodal facilitators responsible for operationalizing this framework by specified deadlines.
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Mutual Fund investors can avail the facility of SWP by creating standing instructions with Mutual Fund or its RTA for periodic redemption... Investors can also avail the facility of STP by creating standing instructions for transferring their investment in one scheme... to another scheme...
Presently, the facility of creating such standing instructions for SWP / STP mandate is not available for the Mutual Fund units held in demat form.
...it has been decided to extend the facility of creating standing instruction for SWP/STP mandate for the Mutual Fund units held in demat form, to facilitate ease of doing business.
In Phase - I, the facility shall be made available for “Unit-based SWP / STP” i.e. standing instructions based on fixed number of units to be redeemed at a specified frequency...
In Phase - ll, the facility shall be extended to “Amount-based SWP / STP” i.e. standing instruction for fixed amount which is required as pay-out at a specified frequency...
Depositories shall be the nodal facilitator for implementation of this framework and shall ensure the implementation of Phase - I by January 31, 2027 and implementation of Phase - ll by April 30, 2027.
Jointly publish a standard framework on their website to operationalize the aforesaid facility by October 31, 2026.
Make amendments to the relevant bye-laws, rules and regulations for the implementation of the above framework, as may be applicable/necessary;
Carry out system changes, if any, to implement the above framework;
Disseminate the provisions of this circular on their website.
The provisions of this circular shall come into force with immediate effect.
This circular is being issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Section 26(3) of Depositories Act, 1996 and Regulation 97 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018...
Source: SecMarx — Extending facility of creating standing instructions for Systematic Withdrawal Plan (SWP)/ Systematic Transfer Plan (STP) for Mutual Fund units held in demat form. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.