Fund houses have started informing investors about holding SIP units in demat by publishing addendums.
Mumbai: Fund houses will allow investors to hold their SIP units in dematerialized form from January, 2012.
SEBI through its circular issued on May 19, 2011 had asked fund houses to allow investors to receive allotment of units in demat account from October 2011. The regulator had observed that AMCs were offering investors to hold units in either physical or demat in close-ended schemes. However, no such option was allowed in open-ended schemes. Fund houses have already started issuing addendums to this effect.
Opting for SIP in demat will entail additional cost for investors transacting through the demat route. Some industry officials feel that the move would not mean any benefit to investors as consolidated account statements are already being issued. The advantage of holding SIP units in demat is to get a consolidated view of stocks and mutual fund units.
“The registrar has to process it and the money gets credited on a weekly basis in the demat account. The units will be credited only after realization of money. Earlier the option to hold units in demat was available through NSE’s Mutual Fund Service System (MFSS) and BSE’s StAR MF Platform. Now, investors can hold their units in demat through the offline mode as well. All the fund houses now have an ISIN. There will be a cost on each transaction for investors transacting through demat route,” says Jimmy Patel, CEO, Quantum Mutual Fund.
