Sebi Floats Consultation Paper On Standing Instructions For Mutual Fund Units In Demat Form

Enhancing Investor Convenience  
Currently, standing instructions for SWP and STP are available only for mutual fund units held in physical form. Sebi’s proposal seeks to extend this facility to demat accounts, enabling investors to automate withdrawals and transfers seamlessly. This step is expected to reduce manual intervention and improve efficiency.  

Digital Push In Mutual Funds  
The initiative aligns with Sebi’s broader agenda of promoting digitization and transparency in India’s capital markets. By integrating standing instructions with demat holdings, investors can enjoy greater flexibility, while intermediaries benefit from streamlined processes and reduced operational risks.  

Industry Implications  
If implemented, the proposal could encourage more investors to shift to demat holdings, boosting participation in mutual funds. It also reflects Sebi’s commitment to harmonizing processes across physical and digital platforms, ensuring consistency and ease of use.  

Key Highlights  

• Sebi issues consultation paper on SWP/STP in demat form  
• Standing instructions currently limited to physical units  
• Proposal aims to simplify investor experience  
• Supports India’s digital financial ecosystem  
• Expected to boost mutual fund participation  

Conclusion  
Sebi’s consultation paper marks a progressive step toward modernizing mutual fund operations. Extending standing instructions to demat holdings will enhance investor convenience, strengthen digital adoption, and contribute to the long-term growth of India’s mutual fund industry.  

Sources: Sebi Consultation Paper, Economic Times, Business Standard