Many mutual fund platforms had already complied with the new rules in June. The earlier deadline of April 1 was recently pushed to July 1 by Sebi. So, what will change?
Mutual fund investments will go from your account to the fund house’s account directly. Which means your money can’t go to a broker’s or the MF platform’s account first. Many investors raised concerns about delayed confirmations of payment last month after some MF platforms moved away from pooling accounts. However, these platforms said they are trying to improve the systems.
What should investors do?
Even though many MF investment platforms have rejigged their SIP systems, investors have to be sure. Starting tomorrow, all the SIPs where your broker transfers funds from your broking account balance to the mutual fund house will stop. Investors need to sign up for fresh National Automated Clearing House mandates in favor of the clearing corporation.
Small distributors say that they were not pooling money any way. “Our mandates were directed to the fund house directly. So, our clients don’t need to bother about it. However, if you are dealing with a bigger distribution firm or an MF platform, they would change it on their level. I don’t think retail investors need to worry about the paperwork,” says Raghvendra Nath, Founder,
Wealth Management, based in Mumbai.
“Usually, the data has to be in place. We have made our systems better since the circular came out. Investors don’t need to worry about doing anything on their own. The distribution platforms have to change the transaction routes. Most of the platforms including us have already done it,” says the CEO of a big mutual fund distribution and research firm.