Mutual fund units held in dematerialised form are now freely transferable, finds team Cafemutual. Read to know more
Mumbai: The Securities and Exchange Board of India (SEBI) has directed the asset management companies to clarify to mutual fund investors by way of an add-on document that the units held in the demat account are now be freely transferable.
This would ensure that the mutual fund units are freely transferable from one demat account to another. This would also result in more liquidity in the market.
SEBI wants the add-on document to be issued latest by October 1, 2010. However restrictions on transfer of units that are applicable to the ELSS schemes during the lock-in period will continue as per the ELSS Guidelines.
Regulation 37(1) says that transferability of units will be only restricted if it is barred under a particular scheme. SEBI feels that the spirit and intention of this regulation has not been understood by the AMCs. The transferability was to be barred in exceptional basis and not on a regular basis. But it is noticed that fund houses have restricted transferability as a general rule.
