SEBI Issues Circular Regarding Investment in Mutual Fund in The Name of a Minor

Recently, SEBI issued a circular about investment in mutual funds made in the name of a minor through a guardian. SEBI has asked AMCs (Asset Management Companies) to make necessary changes to investment in mutual funds made in the name of a minor through a guardian with effect from June 15, 2023.

As per the new circular, payment for investment in mutual funds will be accepted from the bank account of the minor, parent or legal guardian, or from a joint account of minor with parent or legal guardian.

All redemption proceeds will be credited to the minor's verified bank account only irrespective of the source of payment for subscription.

For existing mutual fund folios also, the AMCs will now have to insist on a change of pay-out bank mandate before redemption is processed and redemption proceeds will be only credited to the minor’s verified KYC compliant bank account.

Refer this circular from below link: -

https://www.sebi.gov.in/legal/circulars/may-2023/investment-in-units-of-mutual-funds-in-the-name-of-minor-through-guardian_71148.html

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