Presently cash transactions in Mutual Funds are allowed to the extent of Rs.20,000/- per investor, per mutual fund, per financial year. It has been decided by SEBI to increase this limit from Rs.20,000/- to Rs.50,000/- per investor, per mutual fund, per financial year subject to compliance with applicable Acts, Rules and Regulations.
However, repayment in the form of redemptions, dividend, etc. with respect to aforementioned investments shall continue to be paid only through banking channel.
Relevant SEBI Circular is as follows :-
CIR/IMD/DF/10/2014 , Dated- May 22, 2014
All Mutual Funds/Asset Management Companies (AMCs)/
Trustee Companies/Boards of Trustees of Mutual Funds
Subject: Circular on Mutual Funds
A. Cash investments in Mutual Funds
20,000/- per investor, per mutual fund, per financial year to50,000/- per investor, per mutual fund, per financial year, subject to (i) compliance with Prevention of Money Laundering Act, 2002 and Rules framed there under, the SEBI Circular(s) on Anti Money Laundering (AML) and other applicable AML rules, regulations and guidelines and (ii) sufficient systems and procedures in place.
B. Investment/Trading in Securities by Employees of Asset Management Companies and Trustees of Mutual Funds
a. In point 1.1 (iii) of the guidelines for Investment/Trading in Securities by Employees of Asset Management Companies (AMCs) and Trustees of Mutual Funds, along-with MMMF schemes, Liquid schemes shall be added in list of securities to which the aforesaid guidelines do not apply.
b. In point 3 of the aforementioned guidelines, along-with MMMF schemes, transaction in Liquid schemes shall be exempted from being reported by employees to compliance officer within 7 calendar days from the date of transaction.
c. In Point 3.2 of the aforesaid guidelines, which mentions various situations wherein employees of AMC & Trustees of Mutual Funds shall not purchase or sell units of any schemes, term ‘liquid scheme’ shall be included along-side MMMF schemes.
This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provision 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.
Deputy General Manager
Tel no.: 022-26449232