Online access

MF houses or asset management companies (AMCs) have been allowed to provide instant online access facility to resident individual investors in liquid schemes. The move is part of the efforts to promote digital payments in the MF industry and channelise household savings into the capital market. What Is A Mobile Wallet? How To Install It?

Subscription limit

"MFs/AMCs shall ensure that total subscription through e-wallets for an investor is restricted to Rs 50,000 per mutual fund per financial year," the regulator said, adding that redemptions of such investments can be made only to the bank account of a unit holder. The new facilities would come into force with immediate effect, Securities and Exchange Board of India (Sebi) said in a circular.

How does it work?

According to Sebi, e-wallet issuers would not be permitted to offer any incentive such as cash back, directly or indirectly, for investing in mutual fund scheme through them. Besides, the e-wallet's balance loaded through cash or debit card or net banking can only be used for subscription to mutual funds schemes. Balance loaded through credit card, cash back, promotional schemes would not be allowed for the subscription to MFs. 5 Financial Gifts for Your Valentine

Withdrawal limit

The limit of Rs 50,000 would be an umbrella limit for investment by an investor through e-wallet and/or cash, per mutual fund, Sebi said. In the case of Instant Access Facility, the withdrawal limit would be up to Rs 50,000 or 90 per cent of folio value, whichever is lower. For providing such facility, AMCs would not be allowed to borrow. Liquidity is to be provided out of the available funds from the scheme and AMCs to put in place a mechanism to meet the liquidity demands.

Sebi's instructions

IAF facilitates credit of redemption proceeds in the bank account of the investor on the same day of the redemption request. Sebi has asked fund houses to make appropriate disclosures in the scheme related documents about IAF and ensure that no mis-selling is done on the pretext of instant availability of funds to the investors. "Appropriate disclosures shall be made to the investors mentioning the scenarios under which IAF may be suspended, and that IAF request would be processed as a normal redemption request in such circumstances," the regulator said. As many as 42 fund houses together manage assets worth over Rs 19 lakh crore and mutual fund investor accounts are over 5.54 crore. Where Can You Open A PPF Account?