Description

BSE notice regarding compliance with SEBI circulars dated October 04, 2021, March 15, 2022 and March 31, 2022 on discontinuation of pool accounts for mutual fund transactions on BSE StAR MF Platform.

Summary

BSE has issued a notice (No. 20220328-51 dated March 28, 2022) continuing the implementation of SEBI’s directives on discontinuing pool accounts for mutual fund transactions on the BSE StAR MF Platform. This notice provides detailed operating instructions, settlement processes, and file structures developed jointly by Stock Exchanges and AMFI in consultation with SEBI to facilitate mutual fund transactions for Stock Brokers and Clearing Members.

Key Points

  • Continuation of Notice No. 20220324-52 dated March 24, 2022 regarding discontinuation of pool accounts
  • Three annexures provided: Detailed Operating Instructions (Annexure I), Detailed Settlement Process (Annexure II), and File Structures (Annexure III)
  • Developed jointly between Stock Exchanges and AMFI in consultation with SEBI
  • Applies to all Stock Brokers and Clearing Members on BSE StAR MF Platform
  • BSE service centre support available on 022-45720450 & 022-45720650 (8:00 AM to 7:00 PM on business days)
  • CRS portal available for queries: https://bsecrs.bseindia.com

Regulatory Changes

This notice implements SEBI circulars requiring the discontinuation of pool account usage for mutual fund unit transactions. The regulatory framework mandates:

  • Elimination of pool accounts for mutual fund transactions on stock exchange platforms
  • Implementation of new settlement processes aligned with SEBI requirements
  • Standardized file structures and operating procedures across the industry
  • Enhanced transparency and investor protection in mutual fund transactions

Compliance Requirements

Stock Brokers and Clearing Members must:

  • Follow detailed operating instructions provided in Annexure I
  • Implement the settlement process outlined in Annexure II
  • Adopt file structures specified in Annexure III
  • Ensure all mutual fund transactions on BSE StAR MF Platform comply with the new framework
  • Reference previous notices for complete understanding of requirements
  • Utilize BSE support channels for implementation queries

Important Dates

  • March 28, 2022: Notice issuance date
  • Reference Circulars: October 04, 2021, March 15, 2022, and March 31, 2022 (SEBI)
  • Previous BSE Notices: October 06, 2021; March 15, 2022; March 23, 2022; March 24, 2022

Impact Assessment

Operational Impact:

  • Stock Brokers and Clearing Members must modify their systems and processes to eliminate pool account usage
  • Implementation of new settlement mechanisms requires technical and operational changes
  • Enhanced compliance monitoring and reporting requirements

Market Impact:

  • Improved transparency in mutual fund transactions on exchange platforms
  • Better investor protection through elimination of pool accounts
  • Standardization of processes across the mutual fund distribution ecosystem

Stakeholder Impact:

  • Stock Brokers/Clearing Members: Operational changes, system upgrades, process reengineering
  • AMCs: Alignment with new settlement processes
  • Investors: Enhanced transparency and safety in mutual fund investments through exchange platforms

Contact Information

  • Issuing Officers: Ketan Jantre (Sr. General Manager – Mutual Funds), Zeeta Eustace (Dy. General Manager – Mutual Funds)
  • Support: 022-45720450 & 022-45720650 (8:00 AM - 7:00 PM, business days)
  • CRS Portal: https://bsecrs.bseindia.com

Impact Justification

High importance and impact due to mandatory regulatory compliance requirement affecting all stock brokers and clearing members facilitating mutual fund transactions on BSE platform, with operational changes to settlement processes.