The Securities and Exchange Board of India (SEBI) has introduced a voluntary debit freeze facility for mutual fund folios to strengthen investor security. The feature will allow investors to lock their holdings and prevent any debit transactions such as redemptions or transfers. The circular will take effect from 30 April 2026. The facility will apply to both demat and non-demat mutual fund folios. Investors will initially be able to activate the lock through the MF Central platform. Once activated, no units can be redeemed or transferred until the folio is unlocked by the investor. MF Central is an industry platform jointly managed by Computer Age Management Services and KFin Technologies. The feature will initially be available only to KYC-compliant investors with registered mobile numbers and email IDs. SEBI has tasked the Association of Mutual Funds in India (AMFI) with defining the operational framework. AMFI will outline the process for locking and unlocking folios and specify which transactions remain permitted during the freeze period. Asset management companies and registrars will disclose operational details on their websites and in scheme documents. The measure adds a security layer for mutual fund investors. It is designed to reduce the risk of unauthorized transactions and fraudulent redemptions. The mechanism is similar to debit freeze facilities already available in bank and demat accounts. Powered by Capital Market - Live News |