Sebi allows subscription to MF schemes through e-wallets

Mumbai, May 8 (IANS) Securities markets regulator Sebi on Monday permitted subscription to mutual fund (MF) schemes through e-wallets.

"With an objective to promote digitalisation, MFs/AMCs (mutual funds/asset management companies) can accept investment by an investor through e-wallets (prepaid payment instruments (PPIs))," Sebi said in a circular.

According to Sebi's guidelines, investors can invest up to Rs 50,000 per MF per financial year through e-wallets.

"MFs/AMCs shall ensure that only amounts loaded into e-wallet through cash or debit card or net banking, can be used for subscription to MF schemes," the circular read.

"MFs/AMCs shall ensure that e-wallet issuers shall not offer any incentives such as cashback, vouchers, etc., directly or indirectly for investing in MF schemes."

In addition, MFs and AMCs were asked to instant access facility (IAF) to "resident individual investors".

"In order to further enhance the reach of mutual funds (MFs) towards the retail investors, it has been decided to issue guidelines for extending IAF (instant access facility)," sid the Sebi circular.

"MFs/ AMCs can offer IAF only in liquid schemes of the MF. The monetary limit under IAF shall be Rs 50,000 or 90 per cent of latest value of investment in the scheme, whichever is lower. This limit shall be applicable per day per scheme per investor."

The guidelines mandated MFs and AMCs to provide the redemption capital requested through IAF out of the available funds with the scheme.

"MFs/AMCs should put in place a mechanism so that adequate balance is available in the bank account of the scheme to meet liquidity/redemption requirements under IAF," it said, adding that MFs/AMCs cannot borrow to meet the redemption requirements under IAF.

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