Mutual funds: Sebi extends deadline for compliance with certain directions to July 1

Providing more time to fund houses, Sebi on Thursday extended the deadline for implementing certain directions for mutual funds, including those pertaining to usage of pool accounts for transactions, to July 1.

In October 2021, Sebi had said that stock brokers and clearing members should not accept payment through one-time mandate or issuance of mandates or instruments in their name for mutual fund transactions.

Earlier this month, the regulator said one-time mandates in favour of Sebi-recognised clearing corporations could be accepted from April 1 and now, that deadline has been extended.

“On or after July 1, 2022, new mandates shall be accepted only in favour of Sebi recognised clearing corporations and those mandates shall exclusively be for subscriptions to units of mutual fund schemes and not for any other purpose,” Sebi said on Thursday.

The deadline for discontinuation of usage of pool accounts for transactions in the units of mutual funds, Two Factor Authentication (2FA) for redemption and other related requirements have been extended following a representation from Association of Mutual Funds in India (AMFI).

“On examination of the representation of AMFI, in the interest of the investors, it has been decided to extend the date of applicability of ‘circulars’ including the clauses relating to 2FA for redemption and source account verification to July 1, 2022,” the watchdog said in the circular issued on Thursday.