Sebi extends deadline for compliance with certain guidelines for mutual funds to July 1

Giving finance companies more time, Sebi on Thursday extended the deadline for implementing certain guidelines for mutual funds, including those relating to the use of pool accounts for trading, to July 1.

In October 2021, Sebi had stated that securities dealers and clearing members should not accept payment by single mandate or the issuance of mandates or instruments in their name for mutual fund transactions.

Earlier this month, the regulator said one-time mandates in favor of Sebi-recognized clearing companies could be accepted from April 1 and now that deadline has been extended.

“Effective July 1, 2022, new mandates will only be accepted in favor of Sebi-recognized clearing houses and such mandates will be exclusively for mutual fund unit subscriptions and for no other purpose,” said Sebi Thursday.

The deadline for discontinuing the use of pool accounts for mutual fund share transactions, two-factor authentication (2FA) for redemption and other related requirements have been extended to following a representation by the Association of Mutual Funds in India (AMFI).

“After examining the representation of AMFI, in the interest of investors, it was decided to extend the date of applicability of the ‘circulars’ including the clauses relating to 2FA for the redemption and verification of source accounts to the 1st July 2022,” the watchdog said in the circular released Thursday.