The market regulator said on Tuesday that one-time mandates in favor of Sebi-approved clearing companies could be accepted.
The Securities and Exchange Board of India (Sebi) issued a circular on Tuesday to relax the standards for one-time mandates in transactions in mutual fund units, following several stakeholder representations and recommendations from the Mutual Fund Advisory Board, for a smooth implementation of the circular issued in 2021. The clarifications relate to mutual fund transactions on exchanges and entities, including online platforms other than exchanges.
The market regulator said on Tuesday that one-time mandates in favor of Sebi-approved clearing companies could be accepted. In addition, existing mandates used for mutual fund transactions may remain in the name of the broker/clearing member.
Earlier in October 2021, Sebi had stated that brokers/clearing members facilitating mutual fund transactions may not accept payments through a one-time authorization or issuance of mandates/instruments in their name for mutual fund transactions.
The new standards are subject to asset management companies requiring the PA (payment aggregator) to put in place mechanisms where the beneficiary of the mandate can only be an approved bank account of a mutual fund pool or a mutual fund account.
“On or after April 1, 2022, new mandates will only be accepted in favor of Sebi-approved Clearing Corporations and those mandates are for subscriptions to mutual fund units only and not for any other purpose,” Sebi said Tuesday.
This post Sebi relaxes one-time mandate standards in mutual fund transactions was original published at “https://www.financialexpress.com/market/sebi-eases-norms-for-one-time-mandate-in-mutual-fund-transactions/2462140/”