The way of investing in Mutual Fund Scheme is going to change from July 1. If you invest in MFs then it is important for you to know about this. Investing in mutual fund schemes from a pool account will not be allowed from July 1. This means that the investment money will go directly from the investor’s bank account to the mutual fund house’s bank account.
Mutual fund platforms of stock exchanges will also have to follow this rule. Due to the new rule, investors and other parties involved in the investment process may face some problems in the beginning.
All non-exchange transaction platforms including MF Utility have started complying with this rule from 1st June. He had some problems in the beginning. But, gradually the problems are decreasing. Experts say that by starting to follow the rules of all the parties related to the investment process, the problems are expected to end.
Mutual fund investors and distributors had complained about the new rule. He said that there were many problems including delay in confirmation ofunits allotment, problems in payment through cheque, RTGS, NEFT, failure of SIP transactions.
When the money goes directly from the investor’s bank account to the mutual fund house’s account, the transaction platforms have to rely on the payment processing entity for payment details. Units are allotted to investors only when the fund house gets the money.
The source of money received by the mutual fund house also has to be verified. It is necessary to verify that the money has come directly from the investor’s bank account. This is because mutual fund houses are not allowed to accept third-party payments.
Third-party payment refers to a payment in which the money does not come directly from the investor’s bank account. Meanwhile, MF Utilities has said that the system of registrars and transfer agents has improved.
Now if the rules have been followed in the payment, then there is no delay in allotment of units. Mutual fund distributors say that earlier it used to take up to six days for a transaction to be confirmed. Now it is taking one to two days.
Ganesh Ram, CEO, MF Utilities said, “We have requested SEBI to allow investors to use non-stock exchange platforms for making check payments in mutual funds. We are looking forward to making payments on or before July 15. Want to start NEFT and RTGS facility again.
MF Utilities had discontinued all these three modes of payment from April 1. Work is underway to make payments from the investor’s bank account to the mutual fund house through NEFT and RTGS.
Now all such SIP payments will stop in which your broker used to transfer money from your broking account balance to the mutual fund house. You will need to sign a fresh mandate with the National Automated Clearing House (NACH). This work can be done online.
You have to make sure that you have the correct bank account linked with your mutual funds, as the redemption money will be credited to your bank account. It will not go to your broking account.