New Delhi: Soon, investing in a mutual fund could become less of a headache as the Securities and Exchange Board of India (Sebi) is reviewing the mandatory requirement of Permanent Account Number as a proof for such investments. Sebi sources said the securities board is in fact considering waiver of this norm.
Sebi is looking at options that could offer investing community a temporary respite. Investors are facing a July 2 deadline to have a PAN for investing in mutual funds.
The MF industry had earlier opposed it, saying only 12 to 13 per cent of the investors currently provide the PAN and this could prove a logistical nightmare.
The Indian mutual fund industry is still very young with an investor base of just over 30 millions and Rs 3.4 trillion assets under management.
The government directive had asked the industry to move from mutual fund identification (MIN) to PAN for any new fund investments. The objective behind the government’s decision was to keep tab on all investments made in mutual funds.
A senior Sebi official said options are being explored but did not elaborate. People familiar with the matter in Sebi said it is unlikely that the deadline could be extended in phases, but the regulator would make sure new investors’ applications are not automatically rejected for want of a PAN card.
It could allow investors to continue making investments while their PAN card applications are pending.
Sebi had earlier rejected requests by the industry to stagger the implementation of the 2 July deadline. But the changing demographic of mutual fund investors may well have encouraged the regulator to revisit its initial decision.
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