SEBI issues circular on discontinuation of usage of pool accounts for transactions in Mutual Fund unit

The Securities and Exchange Board of India has banned the usage of pool accounts for mutual fund transactions on October 6, 2021.

 

Key points of the circular are:

  • The asset management companies (AMCs) shall ensure that intermediate pooling of funds or units in any manner by MFDs, IAs, MFU, channel partners or any other service providers/ platforms are discontinued for Mutual Fund transactions.
  • This requirement shall not apply to the SEBI registered Portfolio Managers subject to compliance with SEBI (Portfolio Managers) Regulations, 2020. The AMCs shall put in place necessary systems to ensure that transactions of funds and units pertaining to subscription as well as redemption are directly done between the accounts of the investors and the mutual fund scheme accounts concerned. There will not be any intermediate pooling.
  • In order to ensure that the folio and source bank account belong to the same person, AMCs shall make sure that payment for MF transactions are accepted through only such modes where independent traceability of end investor can be ensured and source account details are available as audit trail without relying on any other intermediary’s records.
  • AMC would be liable to compensate for losses, where unauthorised transaction(s) occur(s) in unit holder’s folio due to fraud/ negligence/ deficiency on the part of the AMC, employee of AMC or persons/ entities whose services have been availed by the AMC including the platform providers, MFDs, RTAs, MFU, and channel partners, irrespective of whether or not the fraud is reported by the unit holder.

*Tanvi Singh, Editorial Assistant has reported this brief.

Join the discussion

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.