SEBI Mandated MF Companies to Process Cancellations of SIP in 2 Days

Current Context: On 11th December 2024, The Securities and Exchange Board of India (SEBI) has introduced a new mandate requiring Mutual Fund (MF) companies to process cancellations of Systematic Investment Plans (SIPs) within 2 working days, starting from December 1, 2024.

 

• Here's a breakdown of what this means:
• Systematic Investment Plan (SIP): A SIP allows investors to invest a fixed amount regularly in mutual funds, usually monthly.
• Cancellation Process: Previously, the time taken to process SIP cancellations varied across different mutual fund companies, often taking longer.
• New Rule: SEBI's mandate standardizes the cancellation process, ensuring it is completed within 2 working days. This speeds up the process and makes it more uniform across the industry.
• Impact on Investors: This change benefits investors by providing a quicker response to their cancellation requests, improving convenience and operational efficiency.

Question:

1 What is the maximum time allowed for SIP cancellations to be processed under the new SEBI rule?

• A) 2 working days
• B) 3 working days
• C) 5 working days
• D) 7 working days

Answer: A) SEBI's mandate ensures that all mutual fund companies complete SIP cancellation requests within two working days, reducing delays and improving uniformity.