Facilitating transactions in Mutual Fund schemes through the Stock Exchange infrastructure
Summary
This SEBI circular permits mutual fund units to be transacted through clearing members of registered stock exchanges and allows depository participants to process redemption requests for demat units. It establishes that payment to brokers or crediting units to their pool accounts discharges the Mutual Fund's obligation to individual investors. The document mandates compliance with existing codes of conduct and requires stock exchanges and depositories to provide investor grievance mechanisms.
Text
units of mutual funds schemes may be permitted to be transacted through clearing members of the registered Stock Exchanges.
to permit Depository participants of registered Depositories to process only redemption request of units held in demat form.
Investors shall receive redemption amount (if units are redeemed) and units (if units are purchased) through broker/clearing member’s pool account.
Payment of redemption proceeds to the broker/clearing members by MF/AMC shall discharge MF/AMC of its obligation of payment to individual investor.
Clearing members and Depository participants will be eligible to be considered as official points of acceptance... AMFI /NISM certification, code of conduct prescribed by SEBI... shall be applicable.
Stock exchanges and Depositories shall provide investor grievance handling mechanism... and shall also monitor the compliance of code of conduct specified in the SEBI Circulars.
The respective stock exchanges and Depositories would provide detailed operating guidelines... ensure that timelines prescribed under SEBI (Mutual Fund) Regulations, 1996 shall be adhered to.
This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996.
Source: SecMarx — Facilitating transactions in Mutual Fund schemes through the Stock Exchange infrastructure. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.