Regulatory Updates: Securities Exchange Board of India - Instant Access Facility (IAF) in Mutual Funds and use of e-wallet for investment in Mutual Funds

SEBI vide its circular no. SEBI/HO/IMD/DF2/CIR/P/2017/39 dated 8 May 2017 has issued guidelines for Instant Access Facility (IAF) in Mutual Funds and use of e-wallet for investment in Mutual Funds, with an objective to channelize households’ savings into capital market and to promote digitalization in mutual funds.

Key Highlights:

1) Monetary LimitMutual Funds (MFs) / Asset Management Companies (AMCs) can offer instant access facility (through online mode) upto INR 50,000 or 90% of folio value, whichever is lower, to resident individual investors in liquid schemes by applying lower of Previous Day Net Asset Value or Net Asset Value of Day on which application is received. 2) Liquidity:

  • Liquidity is to be provided out of the available funds from the scheme and MFs/AMCs to put in place a mechanism to meet the liquidity demands.
  • For providing such facility MFs/AMCs would not be allowed to borrow.

3) MFs/AMCs can accept investment by an investor through e-wallets (Prepaid Payment Instruments (PPIs)) subject to the following:

  • Investment of upto INR 50,000 per Mutual Fund per financial year can be made using e-wallets. However, redemptions of such investments can be made only to a bank account of the unit holder.
  • MFs/AMCs must not offer any incentive such as cash back etc., directly or indirectly for investing in mutual fund scheme through them.
  • E-wallet’s balance loaded through cash or debit card or net banking, can only be used for subscription to mutual funds schemes and balance loaded through credit card, cash back, promotional scheme etc. should not be allowed for subscription to MF schemes.
  • Further, this limit of INR 50,000 would be an umbrella limit for investment by an investor through e-wallet and/or cash, per mutual fund per financial year.

4) The SEBI Circular shall be applicable with immediate effect. Source

Similar Articles

Contact us for a Solution

Contact us for more information about our services and how we can help


As per the rules of the Bar Council of India, we are not permitted to advertise or solicit work. By accessing and browsing through this website, all users agree and acknowledge that the content of this website is for informational purposes only and that there has been no form of solicitation, advertisement or inducement by NovoJuris Legal or its members, in any form. No information provided on this website should be construed as legal advice and NovoJuris Legal shall not be liable for consequences of any action taken by relying on the information provided on this website.