Sebi discontinues the use of pool accounts for transactions in MFs

Redemption of units held in demat, issuance of delivery instruction slip to depository participant to debit units for delivery to clearing corporations may continue

The Securities and Exchange Board of India (Sebi) on Monday said that pooling of funds and units by stock brokers or clearing members shall be discontinued for mutual fund (MF) transactions.

Currently units of the MF schemes move through stock brokers’/clearing members’ pool accounts in an aggregate manner to client account or clearing corporation or the asset management company (AMC) account.

“Pay-in and pay-out of funds shall not be handled by the stock brokers / clearing members. In the same manner, for both demat and non-demat mode transactions, the units shall be credited and debited directly to/from the investors’ demat