Circular no. SEBI/HO/IMD/POD-II/CIR/P/2023/0069; Dated: 12.05.2023
Earlier, SEBI prescribed a uniform process to be followed by Asset Management Companies (AMCs) regarding investments in mutual funds made in the name of a minor through a guardian. Now, SEBI has directed all AMCs to make necessary changes to facilitate such mutual fund transactions w.e.f June 15, 2023.
As per the new norms, payment for investments in mutual funds by any mode shall be accepted from the minor’s bank account, the parent or legal guardian of the minor, or from a joint account of the minor with the parent or legal guardian.
For existing mutual fund folios, the AMCs shall insist upon a Change of Pay-out Bank mandate before redemption is processed.
Further, irrespective of the source of payment for the subscription, all redemption proceeds shall be credited only to the verified bank account of the minor, i.e., the account the minor may hold with the parent/ legal guardian after completing all KYC formalities.
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