Invested hard-earned money in mutual funds? Sebi has taken this big decision - READ CIRCULAR | FULL TEXT

Do you invest in mutual funds? If yes, here is a big development for you from capital markets regulator Sebi.

Big decision by Sebi. Reuters photo.

Do you invest in mutual funds? If yes, here is a big development for you from capital markets regulator Sebi. Taking a major decision, Sebi has now allowed investors to directly access the infrastructure of stock exchanges for purchasing and redeeming mutual fund units straight from mutual fund and asset management companies. Sebi in a circular said, "The move is aimed at further increasing the reach of the platform."

Here is FULL TEXT of the CIRCULAR by SEBI:-

"SEBI/HO/MRD1/DSAP/CIR/P/2020/29

TRENDING NOW

February26, 2020

All recognised Stock Exchanges,Clearing Corporationsand Depositories (except Stock Exchangesand Clearing Corporations in International Financial ServicesCentre)

Dear Sir/ Madam,

Subject: Facilitating transaction in Mutual Fund schemes through the Stock Exchange Infrastructure

SEBI vide its Circular no. CIR/MRD/DSA/32/2013 dated October 04, 2013, and CIR/MRD/DSA/33/2014 dated December 09, 2014 had permitted mutual fund distributors to use recognised stock exchanges' infrastructure to purchase and redeem mutual fund units directly from Mutual Fund / Asset Management Companies.

2.Subsequently, SEBI vide its Circular no. SEBI/HO/MRD/DSA/CIR/P/2016/113 dated October 19, 2016 allowed SEBI Registered Investment Advisors (RIAs) touse infrastructure of the recognised stock exchanges to purchase and redeemmutual fund units directly from Mutual Fund/Asset Management Companies on behalf of their clients, including direct plans.

3.In order to further increase the reach of this platform, it has been decided to allow investors to directly access infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units directly from MutualFund/ Asset Management Companies.

4. The recognised stock exchanges,clearing corporationsand depositoriesmay make necessary amendment to their existing byelaws, rules and/or regulations, wherever required.

5.This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the interestsof investors in securities and to promote the development of, and to regulate the securities market.

6.This circular is available on SEBI website at www.sebi.gov.in at“Legal Framework→Circulars”.

Yours faithfully,

Sanjay Purao
General Manager
Market Regulation Department
Tel. No: 022-26449343
sanjayp@sebi.gov.in"

Prior to this decision by Sebi, the regulator allowed investment advisors and mutual fund distributors to use stock exchanges for sale and purchase of mutual fund units in October 2016 and October 2013, respectively. And, before that only brokers were allowed to utilise the exchange mechanism for transaction in mutual fund units.

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