Mu. SEBI prohibits use of pool account for fund transactions
MUMBAI: To protect investors from misuse of the money they hold, the Indian capital market, SEBI, on Monday issued a notice to stockbrokers, mutual fund distributors and investment advisers from April 1. The use of a pool account for transactions in the fund is prohibited. However SEBI-registered portfolio managers are exempt from this restriction. SEBI issued various circulars in 2009 and 2010 to Mu. Units of fund schemes were allowed to transact through stock brokers and clearing members, respectively, using the stock exchange infrastructure. Also previously Mu. Allowed fund distributors and investment advisers to use the infrastructure of stock exchanges to purchase and redeem mutual fund units on behalf of their clients. Now this new order of SEBI clearly means that stock brokers or clearing members facilitating mutual fund transactions will not be able to accept the directive for Systematic Investment Plans (SIPs) or Lumsum transactions. Moreover, from April these intermediari...