Minors should have bank a/c for MF investments: SEBI

SEBI has mandated bank account for minor to invest in mutual funds. In order to bring about uniform processes across asset management companies, investments made in the name of a minor through a guardian, payment for investment by means of cheque, demand draft or any other mode should be accepted from the bank account of the minor or from a joint account of the minor with the guardian only, the regulator said in a notice..

Upon attaining the status of major, the minor, in whose name the investment was made, should provide all the KYC details, updated bank account details including cancelled original cheque leaf of the new account. No further transactions should be allowed till the status of the minor is changed to major, it further said. AMCs should build a system control at the account set up stage itself for SIP, STP and SWP schemes with a standing instruction of suspension when the minor attains majority and till the status is changed to major, SEBI order said.

To improve the processing turnaround time for transmission requests, AMCs should implement image-based processing wherever the claimant is a nominee or a joint holder in the investor folio. AMCs need to implement a common set of document requirements for transmission of units to claimant who are nominees or joint holders in the investor account, according to SEBI.

Besides, the regulator has asked AMFI to promote the importance of nomination as a part of its investor education and awareness programmes.

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