If you have been investing in Mutual Funds, you may have noticed that some of your SIPs from 1st of July onwards may be stuck with a ‘Under processing’ status for several days.
This is largely due to a change in how funds are collected and transferred to Mutual Fund AMCs, as directed by SEBI in this circular dt. 04 Oct, 2021.
Prior to this circular, a stock broker or Mutual Fund transaction platform would have allowed you to add funds to your trading account, which can be used to buy both stocks and mutual funds, or even use the same funds for your futures and options trading activity. These were called pooled accounts. Even if you did not deal with F&O or bought stocks, and only bought mutual funds, they were still done through the pooled accounts.
As per this circular, SEBI has now banned use of pooled accounts, and has insisted that investments in Mutual Funds be done directly from the client’s primary bank account to the Indian Clearing Corporation Limited (ICCL) and likewise any redemptions be made directly to the client’s primary bank account.
This circular came into account from 1st July 2022.
However, the new payment journey, still goes through a complicated path from your primary bank account, through various payment gateways, through to the exchanges. Not all combinations are working correctly as intended.
This has resulted in some SIPs going through, and some SIPs still getting stuck as the platforms await reconciliation from the stock exchanges.
This issue is seen across investment platforms such as ICICI Direct, Zerodha and others and is not limited to any one platform, one bank, one payment exchange or stock exchange. It would take time for the whole ecosystem to adjust to the new way of doing things. Perhaps we may hope for things to work more smoothly in the next month or so, as the entire ecosystem is working overtime to and make things work as intended.
Until then, we recommend that you remain patient, and stay in touch with your broker / sub-broker / distributor who can help you track the status of your SIPs and help resolve them on a case-to-case basis.