New Delhi, March 6 The market regulator, Sebi, introduced a voluntary debit freeze facility for mutual fund investors across dematerialized (demat) and non-dematerialized (non-demat) folios on Friday, aiming to promote their digital security.
The facility, which will come into effect from April 30, ensures that no units will be debited from mutual fund folios until they are unlocked.
"It has been decided that a voluntary debit freeze facility be introduced for mutual fund investors across demat and non-demat (i.e. Statement of Account) folios to ensure that no units shall be debited from such folios till the time they are unlocked," Sebi said in its circular.
In the first phase, the facility to lock the folio will be provided to mutual fund investors by the Registrar and Transfer Agents (RTAs) through the MF Central platform. The facility will only be available to KYC-compliant investors who have a valid email ID and mobile number (both mandatory).
The industry body, Amfi, will prescribe the detailed process for locking and unlocking folios for all asset management companies (AMCs)/RTAs, and will also provide the processes to be followed by different types of investors after consulting with the regulator.
Also, Amfi has been asked to prescribe the detailed list of financial and non-financial transactions that are allowed during such a lock-in period for AMCs/RTAs.
The detailed process of opting for such a facility and the impact on different financial and non-financial transactions during the lock-in period will be disclosed by all AMCs/RTAs on their websites and in the additional information statement.
