Until now, whenever investments were made in mutual funds, the money would be deducted from the investor's trading account just like stocks. But, from today, pooling of funds and/or units by stock brokers in any form or manner shall be discontinued for mutual fund transactions.
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From July 1, mutual fund investments cannot be initiated from a pool account. The money has to go from the investor's bank account to the bank account of the mutual fund house, as mandated by the Securities and Exchange Board of India (SEBI) as all transaction platforms backed by stock exchanges will implement this.
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Under the new rules, investors' trading accounts can no longer be used to invest in mutual funds. The money will directly go from the investor’s bank account to the bank account of the fund house. Therefore, if one wants to buy mutual funds (MFs), they will have to make payments to the AMC directly from a bank account. Likewise, after redeeming mutual funds, the credit will hit the bank account linked to the investor's Demat account.
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Investors would need to set up a mandate for all their systematic investment plans (SIPs) directly from their bank account as the platforms will have to transit to the AMC SIP mode of investing for all SIPs.
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