1. The timelines for redemption pay-outs from equity schemes have been changed.
SEBI granted permission to stock exchanges in India to use the T+1 settlement cycle from January 1, 2022, to improve the efficiency and strength of the capital markets. As a result, mutual fund investors will now receive their redemption pay-outs within 2 business days after the transaction date (T+2) instead of the previous T+3 timeline. This change was implemented from February 1, 2023, to align with the settlement cycle in the Indian equity markets and provide the same benefit to mutual fund investors.
2. Nomination for existing individual investors
Investors who opened a folio before October 1, 2022, and have not nominated anyone as a beneficiary must provide nomination in the prescribed format or opt out of the nomination by signing a declaration form before March 31, 2023. They can submit the nomination or declaration form online or at any investor service center by physically filling and signing it. If investors fail to comply with this requirement before March 31, 2023, they will not be able to carry out transactions like Redemptions, SWP, Switch, or STP in the applicable folios from April 1, 2023.
3. Two-factor Authentication (2FA) for Subscriptions (Purchases – Lump Sum & SIP)
Starting from 1st April 2023, all investors will be required to complete a two factor authentication process when making online subscriptions for new folios with lump-sum purchase, new folios with SIP, and additional purchases in existing folios. However, for mandates/systematic transactions, this requirement will only be applicable at the time of registration. To authenticate non-demat transactions, a one-time password will be sent to the unit holder’s email or phone number registered with the AMC. To ensure smooth transactions, investors must update all their folios with their current email id and mobile number before the specified deadline. For demat transactions, the depositories’ prescribed process for two-factor authentication will be followed.
4. Link your Aadhaar with PAN
Investors are required to link their Aadhaar and PAN cards before April 1, 2023. If they fail to do so, the PAN card will become invalid and the KYC status will be void, rendering all transactions associated with mutual funds inoperative. However, if Aadhaar is not linked to the PAN card, the IDCW will continue but at a higher TDS rate of 20% for Resident Indians instead of the current 10%.
5. Remediation of folios where PAN / PEKRN is not available
Investors are required to provide their PAN/PEKRN details in their folios before April 1, 2023. Failure to do so may result in restrictions on financial and non-financial transactions in the folio.
6. KYC Revalidation A KRA that is registered with SEBI will begin the process of revalidating KYC records that were submitted with Aadhaar as an OVD before 01-Nov-2022. Investors will be informed through different channels such as email, SMS, or physical letters to complete the revalidation process, which should be done on or before 30-Apr-2023. If investors fail to validate their KYC records, transactions will not be permitte