SEBI has reduced the time limit for cancelling SIP from 10 days to just two days. Now investors can request to stop SIP only two days in advance. Earlier this process had to be started 10 days in advance, due to which many investors did not get a chance to stop their SIP on time.
SEBI has taken a relief decision for those investing in mutual funds through Systematic Investment Plan (SIP). Now you will not have to wait for 10 working days to stop SIP. Under the new rule, now SIP will be stopped in just two days on your request. SEBI has made the new rule mandatory for mutual fund companies and it has been implemented from December 1, 2024.
What is the new rule?
SEBI has reduced the time limit for cancelling SIP from 10 days to just two days. Now investors can request to stop SIP only two days in advance. Earlier this process had to be started 10 days in advance, due to which many investors did not get a chance to stop their SIP on time.
For example, if the date of deduction of your SIP monthly installment is 15th and there is not enough money in your account till the 12th, then now you can request to stop SIP on the 12th. The fund manager will have to cancel it before the 15th and in the meantime no penalty will be levied.
New rule came into effect from December 1, 2024
This new rule of SEBI has come into effect from December 1, 2024. Under this, all mutual fund companies and fund managers have been instructed to fulfill the request to stop SIP within two days. This rule will apply to both online and offline investments.
How will you get the benefit?
Earlier investors had to request 10 days in advance to stop SIP. But it was difficult to guess the status of the bank account so many days in advance. In such a situation, if there was no money in the account, the monthly installment would bounce and a penalty would have to be paid. Now, due to the two-day time limit, investors will not face this problem.
Big relief for investors
This new rule will be a big benefit for 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. This decision of SEBI is being considered a big step towards transparency in the mutual fund industry and strengthening the rights of investors.
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