Capital markets regulator Sebi has agreed to mutual funds industry body AMFI's request to extend the deadline to July 1 for implementing discontinuation of pooling of accounts. Besides, the mutual fund industry has agreed to keep the launch of new fund offers (NFOs) on hold during this period, the Association of Mutual Funds in India (AMFI) said in a statement.
Earlier, the MF industry was required to implement the rule from April 1.
The extension of the deadline is to facilitate an efficient technology overhaul and its smooth transition to serve growing investor needs.
Pooling of investor's funds and units by stockbrokers and clearing members in any form/manner and by the mutual fund investment advisors or distributors (wherever it was taking place) for mutual fund transactions was to be discontinued from April 1, 2022.
However, after mutual discussion and agreement, Sebi has given the mutual fund industry extended timelines until July 1, 2022, to enable the industry to bring in a high level of operational efficiency in the interest of investors and efficient functioning of mutual fund subscriptions and redemption.
N S Venkatesh, Chief Executive, AMFI said, "To stay focused on its efficient and effective implementation of the said October 4, 2021, Sebi circular, we as mutual fund industry, have agreed to keep NFOs launches on hold during this period. We are confident that NFOs will be back on track soon".
"We are confident of faster implementation owing to adoption of new-age technology and with the help of other stakeholders such as stock exchanges and channel partners, so that we can further strengthen investor service and their evolving savings need towards newer mutual fund solutions," AMFI Chairman A Balasubramanian said.
In October 2021, Sebi had said that stockbrokers and clearing members should not accept payment through one-time mandates or issuance of mandates or instruments in their name for mutual fund transactions.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today