Mutual fund new rules: Big change in Mutual fund rules; Investors will get relief from penalty, check the new rules

Mutual Fund New Rules: An investor’s SIP installment is due on the 10th of every month. If there is not enough money in his account by the 7th of any month, then he can request to stop or discontinue the SIP on the 7th. The mutual fund company will have to cancel it before the 10th.

Mutual Fund New Rules: The Securities and Exchange Board of India (SEBI) has made a big change in the rules for mutual fund investors. Now investors will be able to stop their systematic investment plan i.e. SIP or stop its installment just three days before the payment date. After receiving the application, the mutual fund company will have to complete this process within two days (T+2). This will help investors avoid fines and other financial troubles. The new rule has been implemented.

This was the process earlier

Earlier, investors had to apply 10 working days in advance to cancel the SIP. It was difficult to accurately estimate the status of the bank account in such a long time, due to which the installment bounced many times. Due to this, investors had to pay additional charges like ECS or mandate return charges. SEBI has simplified the cancellation process to solve this problem. The new rule will apply to both online and offline SIPs.

Understand the new process like this

Suppose an investor’s SIP installment is on the 10th of every month. In any month, there is not enough money in his account till the 7th. In such a situation, he can request to stop or close the SIP on the 7th. The mutual fund company will have to cancel it before the 10th. Meanwhile, no penalty will be imposed on the investor.

Instructions to mutual fund companies

1. Companies will now have to cancel auto-debit or ECS instructions within two working days.
2. The investor will have to be informed if the SIP installment is missed for the first time.
3. The investor will have to be told that if he misses paying the installment three times in a row, then the SIP will be stopped completely.
4. Information about the cancellation of SIP will have to be given to the investor by sending a message.
5. The option to cancel SIP will have to be made available on all platforms.

Big relief for investors

This decision of SEBI is being considered a big step towards transparency in the mutual fund industry and strengthening the rights of investors. Experts say that this new rule will give a big benefit to SIP investors. Now they will not have to fear penalty and they will be able to have better control over their investments. This step will not only increase the convenience of investors, but will also help them in financial planning.

Can be cancelled due to these reasons

• Lack of funds
• Poor performance of the scheme
• Service related problems
• Intention to invest in another scheme
• Change in fund manager

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