The Securities and Exchange Board of India has issued a circular allowing investors to create standing instructions for Systematic Withdrawal Plans and Systematic Transfer Plans for mutual fund units held in demat form. The facility was previously available for mutual fund units handled through the mutual fund or its registrar and transfer agent, but not for demat holdings. Depositories will act as the nodal facilitators for the new framework. Implementation will be phased. Phase I covers unit-based SWP and STP, allowing instructions based on a fixed number of units to be redeemed at a specified frequency for withdrawal or for investment into another scheme of the same mutual fund, and must be in place by January 31, 2027. Phase II extends the facility to amount-based SWP and STP, covering fixed payout amounts or transfers into another scheme of the same mutual fund, and must be implemented by April 30, 2027. Before that, depositories must jointly publish a standard operating framework by October 31, 2026, amend relevant bye-laws, rules and regulations as needed, and complete any required system changes. The circular takes effect immediately.
Securities & Exchange Board of India2026-07-17
Securities and Exchange Board of India extends SWP and STP standing instruction facility to mutual fund units held in demat form, phased rollout by April 2027
The Securities and Exchange Board of India has allowed standing instructions for SWP and STP in respect of mutual fund units held in demat form, a facility that was not previously available for such holdings. Depositories must implement unit-based SWP and STP by January 31, 2027 and amount-based SWP and STP by April 30, 2027, with a joint standard framework due by October 31, 2026.