Direct Stock Investing vs Mutual funds - An Analysis
New Process for Transfer of Mutual Fund Units in Non-Demat Mode
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Key Highlights of AMFI Best Practices Guidelines (Circular No. 116 / 2024-25) Background SEBI regulations permit mutual fund units to be freely transferable unless otherwise restricted. While units in demat mode are freely transferable, units in SoA (non-demat) mode require dematerialization for transfer. Challenges with SoA transfers include the risk of duplicate transfers and lack of visibility into pledges or redemptions until the transfer is registered. To address investor and distributor concerns, AMFI proposes a phased introduction of the facility for transferring units held in SoA mode. Key Provisions for SoA Transfers Applicability : Transfer facility available across all mutual fund schemes except ETFs. Partial transfers are allowed, but if residual units fall below the scheme's minimum threshold, they will be redeemed automatically. Restrictions & Safeguards : Redemption of transferred units is restricted for 10 days post-transfer to mitigate fraud risk. Transfer...
