SEBI has banned the launch of new schemes till July 1, giving a setback to mutual fund houses. The reason for this is that if investors invest through any third party i.e. distributors, online platforms or stock brokers, then this money should go directly into the account of fund houses and not in the accounts of these people.
In a letter to the Association of Mutual Funds in India (AMFI), SEBI said that till the matter is not resolved, there will be a ban on launching new schemes.
Cheque will be taken in the name of Fund House only. Mutual Fund Distributor can take investor approval for cheque or auto debit only in the name of Fund House. While selling the unit twice, it has to be ensured that the right investor is selling his/ her unit.
SEBI had also directed that this rule should be implemented from April 1, 2022. However, only last month, AMFI had appealed to SEBI to give some more time for this, as there is no complete preparation to adopt the new system.
Accepting this appeal, SEBI said that it should be implemented from July 1. Along with this, in a letter sent to AMFI, SEBI said that from October 2021, a lot of time has been given for this.