Sebi proposes a voluntary debit freeze for MF folios

Mumbai: The Securities and Exchange Board of India (Sebi) on Friday proposed introducing a voluntary debit freeze facility for mutual fund investors across both demat and non-demat folios.

The facility is aimed at promoting digital security and ensuring that no units are debited from mutual fund folios until they are unlocked.

In the first phase, the facility to lock folios would be provided to mutual fund investors by the Registrar and Transfer Agents (RTAs) through the MF Central platform. The facility would be enabled only for KYC-compliant investors with valid email IDs and mobile numbers.


The regulator said the Association of Mutual Funds in India (AMFI) would prescribe the detailed process for locking and unlocking folios for all asset management companies (AMCs) and RTAs, and also outline the processes to be followed by different types of investors.

"AMFI is also advised to prescribe the detailed list of financial transactions and non-financial transactions that are allowed during such lock-in period to AMCs / RTAs," Sebi said in a circular.

It also said the detailed process for opting for such a facility, and the impact on different financial and non-financial transactions during the lock-in period, should be disclosed by all AMCs and RTAs on their websites and in the Statement of Additional Information (SAI).

The new rule would come into effect from April 30, 2026.