Market regulator, Securities Exchange and Board of India has barred mutual fund distributors, investment advisers, online platforms from pooling of funds or units for MF transactions from 1st April.
Presently, funds and units of mutual fund schemes move through stock brokers' or clearing members' pool accounts in an aggregate manner to client account or Clearing Corporation/AMC account, as the case may be.
According to a report in “The Economic Times”, S EBI said it observed that based on bilateral understanding with AMCs, a few platforms pool the client's funds into a nodal account and subsequently transfer to fund houses either on per transaction basis or lump sum basis.
SEBI has now said that AMCs (asset management companies) shall ensure that MF transactions (either financial or non-financial) are executed only if there is a service agreement between the AMC and the service provider or platform.
While pooling of funds has been discontinued for MF transactions, this requirement will not apply to the SEBI registered portfolio managers subject to compliance with SEBI (Portfolio Managers) Regulations, 2020. For subscription, funds should be credited directly from the investors’ account into the mutual fund scheme account without any intermediate pooling.
Likewise, units should also be directly credited into the investors account without any intermediate pooling. For redemption, funds should be directly credited to investors’ bank account from the mutual fund scheme, the regulator said.
The regulator has further clarified through its circular that stock brokers/clearing members facilitating mutual fund transactions will not accept one-time mandates for SIPs or lumpsum transactions in their name. Also, cheque payments from investor should be in favour of the respective mutual fund scheme only.