New Delhi: The Securities and Exchange Board of India (SEBI) on Monday decided to ban the use of pool accounts for mutual funds transactions. Fundraising by stockbrokers, MF distributors and investment advisers will be suspended from April 1 next year, market regulator Sebi said in a statement.
SEBI said the move was “to protect investors’ interest in securities”.
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Funds for regulator asset management companies (AMCs) must be obtained directly from the investor’s account and paid directly into the investor’s account. “Payments / payments will not be handled by stockbrokers or clearing members.”
It said the same direction should be followed for demat and non-demat transactions.
“AMC continues to comply with the provisions of the PMLA (Anti-Money Laundering Act) and does not permit transactions with third party bank accounts. The SEBI statement said.
SEBI also said that stockbrokers or members who facilitate MF transactions should not accept orders for SIP (Systematic Investment Plans) or bulk transactions in their name.
It does not make it clear that stockbrokers or cleaners should not accept payments by one time order or issue orders / tools in their name for MF transactions.
However, the market controller noted that one-time orders may be accepted in favor of SEBI-approved cleaning companies.
However, SEBI has highlighted that check payments or MF schemes (s) may be accepted from investors issued in support of the respective SEBI approved cleaning companies.
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It also said that the stock exchanges and AMFI (Association of Mutual Funds in India) should consult with SEBI and provide operating guidelines to stock brokers or clear members and AMCs to facilitate MF transactions on stock exchanges.
Through its two circulars in 2009 and 2010 the regulation allowed for the exchange of units of MF schemes through registered stockbrokers and cleaning members using the exchange infrastructure.
MF allowed distributors and investment advisers to use the infrastructure of the stock market to buy and redeem mutual fund units on behalf of their customers.