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    Aug 18, 2010

    How to transfer mutual fund unit SEBI new circular

    Sebi has issued a new circular about how to transfer mutual fund unit.

    Securities and Exchange Board of India
    CIR/IMD/DF/10/2010 August 18, 2010
    All Mutual Funds/Asset Management Companies/
    Trustee Companies/Boards of Trustees of Mutual Funds/All registered Stock
    Exchanges/NSDL/CDSL/All registered Registrars and Share transfer Agents/AMFI
    Sub: Transferability of Mutual Fund units

    1. Regulation 37(1) of SEBI (Mutual Fund) Regulations, 1996 states that “a unit unless
    otherwise restricted or prohibited under the scheme, shall be freely transferable by act of
    parties or by operation of law.”The spirit and intention of this regulation is not to prohibit
    transferability of units as a general rule or practice. However, it is noticed that mutual fund
    schemes prohibit transfer on a regular basis instead of on an exceptional basis.

    2. In order to facilitate transferability of units of mutual funds held in one demat account to
    another demat account, it has been decided that all AMCs shall clarify by way of an
    addendum that units of all mutual fund schemes held in demat form shall be freely
    transferable from the date of the issue of said addendum which shall be not later than
    October 1, 2010. However, restrictions on transfer of units of ELSS schemes during the
    lock-in period shall continue to be applicable as per the ELSS Guidelines.

    3. This circular is issued in exercise of powers conferred under section 11(1) of the Securities
    and Exchange Board of India Act, 1992, read with the provisions of regulation 77 of SEBI
    (Mutual Funds) Regulations, 1996 to protect the interests of Investors in securities and to
    promote the development of and to regulate the securities market.
    Yours faithfully,

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