Description
BSE reminder regarding adherence to SEBI circulars dated October 04, 2021, March 15, 2022 and March 31, 2022 concerning discontinuation of pool accounts for mutual fund transactions on BSE StAR MF Platform.
Summary
BSE has issued a reminder notice (originally dated March 28, 2022) regarding adherence to SEBI circulars mandating the discontinuation of pool accounts for mutual fund transactions on the BSE StAR MF Platform. The notice provides detailed operating instructions, settlement processes, and file structure specifications developed jointly by Stock Exchanges and AMFI in consultation with SEBI to facilitate the transition for stock brokers and clearing members.
Key Points
- Continuation of Notice No. 20220324-52 dated March 24, 2022 regarding discontinuation of pool accounts
- Detailed operating instructions provided in Annexure I
- Settlement process specifications outlined in Annexure II
- Technical file structures detailed in Annexure III
- Instructions developed jointly between Stock Exchanges and AMFI in consultation with SEBI
- BSE service centre support available on 022-45720450 & 022-45720650 (business days, 8 AM to 7 PM)
- Query submission available through CRS portal: https://bsecrs.bseindia.com
- References provided to earlier notices dated October 6, 2021, March 15, 2022, March 23, 2022, and March 24, 2022
Regulatory Changes
This notice reinforces SEBI’s regulatory directives issued on:
- October 04, 2021
- March 15, 2022
- March 31, 2022
The primary regulatory change mandates the complete discontinuation of pool account usage for mutual fund unit transactions on stock exchange platforms. This represents a fundamental shift in how mutual fund transactions are settled, requiring direct client-level settlement mechanisms instead of pooled broker accounts.
Compliance Requirements
For Stock Brokers and Clearing Members:
- Implement systems to facilitate mutual fund transactions without using pool accounts
- Follow detailed operating instructions as specified in Annexure I
- Adhere to settlement processes outlined in Annexure II
- Configure systems according to file structure specifications in Annexure III
- Ensure all mutual fund transactions on BSE StAR MF Platform comply with new settlement framework
- Contact BSE support for technical assistance or query resolution
Documentation Required:
- Review all three annexures (Operating Instructions, Settlement Process, File Structures)
- Update internal procedures to align with new requirements
Important Dates
- Original Notice Date: March 28, 2022
- Referenced SEBI Circulars: October 04, 2021, March 15, 2022, March 31, 2022
- Current Reminder: November 21, 2025
- No new implementation deadline specified in this reminder notice
Impact Assessment
Operational Impact:
- Stock brokers and clearing members must maintain separate client-wise settlement accounts instead of pooled arrangements
- Significant system and process changes required for entities still using pool accounts
- Increased operational complexity in managing individual client settlements
- Enhanced reconciliation requirements at client level
Market Impact:
- Improved transparency in mutual fund transactions
- Better investor protection through direct client-level settlements
- Reduced counterparty risk by eliminating pooled account structures
- Enhanced audit trail for regulatory oversight
Compliance Impact:
- Non-compliance with pool account discontinuation may result in regulatory action
- Market participants must ensure full adherence to avoid penalties
- Ongoing monitoring required to maintain compliance standards
Support Available:
- BSE provides dedicated support through service centre and CRS portal
- Technical assistance available during business hours for implementation queries
Impact Justification
High importance as this is a regulatory compliance requirement mandated by SEBI affecting all stock brokers and clearing members conducting mutual fund transactions. The discontinuation of pool accounts represents a significant operational change with potential penalties for non-compliance.