Description

BSE issues detailed operating instructions and settlement process for stock brokers and clearing members following SEBI's directive to discontinue pool accounts for mutual fund transactions on BSE StAR MF Platform.

Summary

BSE has issued detailed operating instructions, settlement processes, and file structures for stock brokers and clearing members to facilitate mutual fund transactions on the BSE StAR MF Platform following the discontinuation of pool accounts. This circular is issued in continuation of Notice No. 20220324-52 dated March 24, 2022, and follows discussions between Stock Exchanges and AMFI in consultation with SEBI regarding implementation of SEBI circulars dated October 04, 2021, March 15, 2022, and March 31, 2022.

Key Points

  • Continuation of earlier notice 20220324-52 dated March 24, 2022 regarding discontinuation of pool accounts
  • Detailed operating instructions provided as Annexure I
  • Detailed settlement process document provided as Annexure II
  • File structures specification provided as Annexure III
  • Jointly developed by Stock Exchanges and AMFI in consultation with SEBI
  • Support available through BSE service centre on 022-45720450 & 022-45720650 (8:00 AM to 7:00 PM on business days)
  • Queries can be raised on BSE CRS portal: https://bsecrs.bseindia.com

Regulatory Changes

This circular implements SEBI’s directive to discontinue the usage of pool accounts for transactions in units of mutual funds on stock exchange platforms. The change requires stock brokers and clearing members to adopt new operational procedures for handling mutual fund transactions, moving away from the pooled account structure to a more transparent and compliant settlement mechanism.

Compliance Requirements

  • Stock brokers and clearing members must implement the detailed operating instructions provided in Annexure I
  • Entities must adopt the new settlement process as outlined in Annexure II
  • Systems must be configured to handle the file structures specified in Annexure III
  • All mutual fund transactions on BSE StAR MF Platform must comply with the new procedures
  • Brokers must ensure their systems and processes align with SEBI circulars dated October 04, 2021, March 15, 2022, and March 31, 2022

Important Dates

  • Notice Date: March 28, 2022
  • Notice Number: 20220328-51
  • Previous related notices issued on: October 06, 2021, March 15, 2022, March 23, 2022, and March 24, 2022

Impact Assessment

This circular has significant operational impact on stock brokers and clearing members conducting mutual fund transactions on the BSE StAR MF Platform. The discontinuation of pool accounts requires substantial changes to settlement systems, operational workflows, and reconciliation processes. Brokers must invest in system upgrades and process modifications to ensure compliance. The change enhances transparency and regulatory oversight of mutual fund transactions, improving investor protection. Support infrastructure has been established by BSE to assist members during the transition. The high impact classification reflects the mandatory nature of compliance and the operational complexity involved in implementing the new settlement framework across the mutual fund trading ecosystem.

Impact Justification

Critical regulatory compliance issue affecting all stock brokers and clearing members conducting mutual fund transactions on BSE platform. Requires operational changes to settlement processes following SEBI directives.