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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Partial Modification in the SEBI Circular regarding Investment in units of Mutual Funds in the name of minor through guardian

12-May-2023 | SEBI/HO/IMD/POD-II/CIR/P/2023/0069

Securities and Exchange Board of India has issued a circular regarding modification in the SEBI Circular no. SEBI/HO/IMD/DF3/CIR/P/2019/166 dated, 24th December 2019 in respect of investments made in the name of a minor through a guardian, effective from 15th June 2023

highlights of the modification are:
i) Para 1(a) shall read as Payment for investment by any mode shall be accepted from the bank account of the minor, parent or legal guardian of the minor, or from a joint account of the minor with parent or legal guardian. For existing folios, the AMCs shall insist upon a Change of Pay-out Bank mandate before redemption is processed.
ii) Irrespective of the source of payment for subscription, all redemption proceeds shall be credited only in the verified bank account of the minor, i.e., the account the minor may hold with the parent/ legal guardian after completing all KYC formalities.
iii) All other provisions mentioned in the aforesaid circular shall remain unchanged.

All AMCs are advised to make the necessary changes to facilitate the above changes in mutual fund transactions w.e.f. June 15, 2023

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