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In a frequently asked questions (FAQ) for MFDs, L&T MF said that MFDs should download their brokerage statement and GST invoices within three months of the effective date of merger between L&T MF and HSBC MF.
However, the fund house advised MFDs to download these documents before the merger date to avoid any challenges in the future.
The fund house further said that assets of MFDs will automatically move to the HSBC MF.
Also, distributors who are not empanelled with HSBC need not worry. “Distributors who are currently empaneled with L&T AMC are deemed to be empaneled with HSBC AMC. A communication will be sent to all distributors in this regard, seeking consent for the assignment of contracts with HSBC AMC. Agreements, if any, signed by the distributors with HSBC AMC shall continue and remain in force,” said the fund house.
“Even if the distributors do not respond within the specified time, there would be no impact, as they would be deemed to have consented for the assignment of contract to HSBC MF and distributors empanelment will be continued with HSBC MF post acquisition,” said the fund house.
The fund house clarified that MFDs can continue to use partner app – Digital Dosti Application with their existing login credentials. Also, if an MFD works with both AMCs, they will see details of investors of both AMCs on this app.
In case any of your clients want to redeem their investment during the exit period, you will have to ensure that their folio is KYC complaint along with PAN and FATCA declaration, said the fund house.
Remember that the folio of common investors of both fund houses will not be merged automatically. Your client will have to submit a request for consolidation of his/her folios at AMC branch office or CAMS. They can also request for consolidation online through MF Central. Also, merger of folios will not entail any tax as such a transaction is not considered as transfer of capital assets.
On NRI investments, the existing investments of US and Canada citizens will move to HSBC. However, such investors cannot make new purchases. Their SIPs/STPs will also not be honoured, clarified the fund house.
NRIs can continue to do all non-financial transactions, clarified the fund house.
Here are some useful links related to the merger:
