Mutual fund investors to get consolidated account statement from March 2015

Securities and Exchange Board of India has directed depositories and asset management companies (AMCs) and mutual fund registrars and transfer agents (MF-RTAs) to put in place systems to facilitate generation and dispatch of single consolidated account statements (CAS) for investors having MF investments and holding demat accounts.

This has been done to comply with the announcement in the Interim Budget to create one record for all financial assets of every individual.

Sebi has asked AMCs and RTAs to share the requisite information with the depositories on a monthly basis, from March 2015, to enable generation of CAS.

Consolidation of account statement will be done on the basis of PAN. In case of multiple holding, it will be based on PAN of the first holder and pattern of holding. Based on the PANs provided by the AMCs / MF-RTAs, the depositories would match their PAN database to determine the common PANs and allocate the PANs among themselves for the purpose of sending CAS.

For PANs which are common between depositories and AMCs, the depositories would send the CAS.

In other cases (ie PANs with no demat account and only MF units holding), the AMCs/ MF-RTAs will continue to send the CAS to their unit holders as is being done at present in compliance with the Sebi Mutual Fund Regulations.

In case investors having multiple accounts across two or more depositories, the depository having the demat account which has been opened earlier will be the default depository, which will consolidate details across depositories and MF investments and dispatch the CAS to the investor.

However, option will be given to the demat account holder by the default depository to choose the depository through which the investor wishes to receive the CAS.
 
The CAS will be generated on a monthly basis. The AMCs / MF-RTAs should provide the data with respect to the common PANs to the depositories within three days from the month-end. The depositories will then consolidate and dispatch the CAS within ten days from the month-end.

Where statements are presently being dispatched by email either by the mutual funds or by the depositories, CAS will be sent through email. However, where an investor does not wish to receive CAS through email, option will be given to the investor to receive the CAS in physical form at the address registered in the depository system.

Depositories will put in place a proper grievance redressal mechanism and the AMCs / MF-RTAs concerned will be communicated to the investors through CAS. AMCs / MF-RTAs will be accountable for the authenticity of the information provided through CAS in respect of MF investments and timely sharing of such information with depositories. The depositories would be responsible for the timely dispatch of CAS to the investors serviced by them and the demat account information.

The depositories and the AMCs / MF-RTAs would have to ensure data integrity and confidentiality about the shared information. The depositories are permitted to utilise the shared data only for the purpose of providing CAS and are are barred from sharing it with their depository participants.

Where depositories are required to share such information with unregulated entities like third-party printers, the depositories should enter into necessary data-confidentiality agreements with them.

The CAS will be implemented from March 2015 with respect to the transactions carried out during the month of February 2015.

If an investor does not wish to receive CAS, an option will be given to the investor to indicate negative consent. Depositories should, accordingly, inform investors in their statements from January 2015 about the facility of CAS and give them information on how to opt out of the facility if they do not wish to avail it.

Where such an option is exercised, the concerned depository should inform the AMC/MF-RTA accordingly and the data with respect to the said investor should not be shared by the AMC / MF-RTA with the depository.

If there is any transaction in any of the demat accounts of the investor or in any of his mutual fund folios, then CAS should be sent to that investor on a monthly basis. 

In case there is no transaction in any of the mutual fund folios and demat accounts then CAS with holding details should be sent to the investor on half-yearly basis. However, in case of demat accounts with nil balance and no transactions in securities and in mutual fund folios, the requirement to send physical statement will be applicable as per Sebi guidelines.

Further, the holding statement dispatched by the DPs to their BOs with respect to the dormant demat accounts with balances should also be dispatched half-yearly.

The dispatch of CAS by the depositories to BOs would constitute compliance by the depository participants with requirement under Regulation 43 of Sebi (Depositories and Participants) Regulations, to provide statements of account to the BOs as also compliance by the MFs with Sebi (Mutual Funds) Regulations.