SEBI Proposes Standing Instructions For SWP, STP In Demat Mutual Fund Units

Markets regulator Sebi on Thursday proposed to extend the facility of standing instructions for Systematic Withdrawal Plans (SWP) and Systematic Transfer Plans (STP) to mutual fund units held in demat form in a bid to facilitate ease of doing business.

At present, such standing instructions are available only for units held in statement of account (SOA) mode, while demat investors must give separate instructions for each transaction.

In its consultation paper, Sebi suggested that the "facility of standing instruction for SWP/STP may also be extended for the MF units held by investors in demat form, thereby facilitating ease of doing business to various stakeholders of the MF industry".

It has been proposed the implementation of extending facility of standing instruction in two phases.

In Phase I, investors would be able to register unit-based SWP/STP mandates through depositories or stock exchange members, with execution carried out on stock exchange platforms and minimal changes required at registrars and transfer agents (RTAs).

Phase II would allow SWP/STP instructions to be processed through RTAs, enabling amount-based and other variants such as appreciation-based and swing STPs.

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Sebi said extending the facility would ease operations for investors and market intermediaries and improve ease of doing business.

The proposal is based on recommendations of a working group and deliberations by Sebi's Secondary Market Advisory Committee.

The Securities and Exchange Board of India (Sebi) has invited public comments on the proposals until February 26.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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