SEBI decides to allow investors to directly access infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units directly from Mutual Fund/Asset Management Companies

The Securities and Exchange Board of India (“SEBI”) has, through a Circular dated 26th February 2020, allowed investors to directly access infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units directly from Mutual Fund / Asset Management Companies.

Also, Circular states that the recognised stock exchanges, clearing corporations and depositories may make necessary amendment to their existing byelaws, rules or regulations, wherever required.

The decision to facilitate transaction in Mutual Fund schemes through the Stock Exchange Infrastructure has been taken in pursuance of the following Circulars issued by SEBI:

  1. Circular dated October 04, 2013 and dated December 09, 2014 which permitted mutual fund distributors to use recognised stock exchanges’ infrastructure to purchase and redeem mutual fund units directly from Mutual Fund / Asset Management Companies.

 

  1. Circular dated October 19, 2016 which allowed SEBI Registered Investment Advisors (RIAs) to use infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units directly from Mutual Fund/ Asset Management Companies on behalf of their clients, including direct plans.

Source: Securities and Exchange Board of India

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