SEBI by way of circular dated 06.03.20261 (“MF Circular”), has introduced a voluntary lock in / debit freeze facility for Mutual Fund (“MF”) folios.
SEBI, in consultation with the Association of Mutual Funds in India (“AMFI”), has introduced a voluntary debit freeze facility for MF investors across demat and non-demat (i.e., Statement of Account) folios, to ensure that no units shall be debited from such folios until they are unlocked. The key aspects of the MF Circular are as follows:
- Availability of the Facility: In the first phase, the facility to lock the folio shall be provided to MF investors by the Registrar and Transfer Agents (“RTAs”) through the inter-operable RTA platform, MF Central. The facility shall be enabled only for KYC compliant (Registered/ Validated) investors having a valid Email ID and Mobile number (both mandatory).
- Role of AMFI: AMFI has been directed to prescribe the detailed process for locking and unlocking of folios to all Asset Management Companies (“AMCs”) / RTAs, in consultation with SEBI. AMFI is also required to prescribe the detailed list of financial and non-financial transactions that are permitted during the lock-in period.
- (c) Disclosure Requirements: The detailed process for opting for the debit freeze facility, along with its impact on financial and non-financial transactions during the lock-in period, shall be disclosed by all AMCs / RTAs on their respective websites and in the Statement of Additional Information (“SAI”).
The MF Circular shall come into effect from 30.04.2026.
Footnote
1. Introduction of Voluntary Lock-in / Debit freeze facility to Mutual Fund folios
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