Investors can buy MF units through digi wallets: Sebi
The board of the Securities and Exchange Board of India (Sebi) on Wednesday approved a slew of proposals, including allowing investors to buy mutual fund units through digital wallets. It also disallowed domestic residents and NRIs from investing through the P-Note route, apart from giving QIB status to NBFCs.
At its first meeting under the new chairman Ajay Tyagi, Sebi also approved a proposal to extend exemption under Sebi (ICDR) Regulations, 2009, relating to preferential allotments to scheduled banks and financial institutions that will help them to participate in the strategic debt restructuring programme. With the objective to channelise household savings into the capital market and to promote digitisation in mutual funds, the Sebi board after deliberation, has decided that mutual funds can offer instant access facility (through online mode) of up to Rs 50,000 or 90 per cent of folio value, whichever is lower to domestic individual investors in liquid schemes by applying lower of Previous Day NAV or Prospective NAV.
For providing such a facility AMCs would not be allowed to borrow, Sebi said. Liquidity is to be provided out of the available funds from the scheme and AMCs are to put in place a mechanism to meet the liquidity demands.
This facility can also be used for investment in mutual funds through tie-ups with payments banks, provided necessary approvals are taken from RBI.
Presently, any scheme providing this facility would reduce the limit to Rs 50,000 immediately. It also said investment of up to Rs 50,000 per mutual fund can be made using e-wallets in a financial year. However, redemptions of such investments can be made only to a bank account of the unit holder. E-wallet issuers must not offer any incentive such as cash back directly or indirectly for investing in mutual fund scheme through them.
E-wallet’s balance loaded through cash or debit card or net banking can only be used for subscription to mutual funds schemes.
The balance loaded through credit card, cash back and promotional schemes, among others, should not be allowed for subscription to MF schemes.
In addition, this limit of Rs 50,000 would be an umbrella limit for investment by an investor through e-wallet and/or cash, per mutual fund per financial year, Sebi said. RBI-registered NBFCs with a net worth of more than Rs 500 crore will be included in the category of QIBs, which will be eligible for participation in IPOs with specifically earmarked allocations.
The Sebi board approved proposals to further strengthen the monitoring of issue proceeds raised in IPOs/FPOs/rights issues.
These measures include mandatory appointment of monitoring agency where the issue size (excluding offer for sale component) is more than Rs 100 crore and frequency of submission of monitoring agency report has been enhanced from half-yearly to quarterly.
The board also approved a proposal to permit integration of broking activities in equity markets and commodity derivatives markets under a single entity.
It also approved the proposal to remove this restriction by amending Stock Brokers Regulations, also recommending to the central government for amending SCR Rules accordingly.
Columnist: 
Ashwin J Punnen
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