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Soon, investors will require to key in OTP to invest in mutual funds through online mode.
In a circular, SEBI said that two-factor authentication will also be implemented for subscription of mutual funds. Currently, it is applicable at the time of redemption.
For switches and SIP, OTP will be required only at the time of registration, clarified SEBI.
SEBI said, “In case of subscription and redemption of units, Two-Factor Authentication (for online transactions) and signature method (for offline transactions) shall be used for authentication. One of the Factors for such Two-Factor Authentication for non-demat transaction shall be a One-Time Password sent to the unit holder at his/her email/ phone number registered with the AMC/RTA. In case of demat transaction, process of Two-Factor authentication as laid down by the Depositories shall be followed. It is also clarified that in case of mandates/systematic transactions the requirement of Two-Factor Authentication shall be applicable only at the time of registration of mandate/systematic transactions.”
This will be applicable from April 1, 2022.
