SEBI has reduced the time limit for cancelling SIP from 10 days to just two days. Now investors can request to stop SIP only two days in advance. Earlier this process had to be started 10 days in advance, due to which many investors did not get a chance to stop their SIP on time.
SEBI has taken a relief decision for those investing in mutual funds through Systematic Investment Plan (SIP). Now you will not have to wait for 10 working days to stop SIP. Under the new rule, now SIP will be stopped in just two days on your request. SEBI has made the new rule mandatory for mutual fund companies and it has been implemented from December 1, 2024.
What is the new rule?
SEBI has reduced the time limit for cancelling SIP from 10 days to just two days. Now investors can request to stop SIP only two days in advance. Earlier this process had to be started 10 days in advance, due to which many investors did not get a chance to stop their SIP on time.
For example, if your SIP EMI deduction date is 15th and you do not have sufficient funds in your account till 12th, you can now request to stop the SIP on 12th. The fund manager has to cancel it before 15th and no penalty will be charged in the meantime.
New rule came into effect from December 1, 2024
This new rule of SEBI has come into effect from December 1, 2024. Under this, all mutual fund companies and fund managers have been instructed to fulfill the request to stop SIP within two days. This rule will apply to both online and offline investments.
How will you get the benefit?
Earlier, investors had to request to stop SIP 10 days in advance. But it was difficult to estimate the status of the bank account so many days in advance. In such a situation, if there was no money in the account, the monthly installment would bounce and a penalty would have to be paid. Now, due to the two-day time limit, investors will not face this problem.
Big relief for investors
This new rule will give a big benefit to SIP investors. Now they will not have to fear penalty and they will be able to have better control over their investments. This step will not only increase the convenience of investors but will also help them in financial planning. This decision of SEBI is considered a big step towards transparency in the mutual fund industry and strengthening the rights of investors.
