- SEBI introduces voluntary lock in feature to secure mutual fund investments
- MF Central platform allows investors to lock or unlock folios digitally
Hyderabad: The Securities and Exchange Board of India has introduced a new rule aimed at protecting investors from cyber fraud in mutual funds. The regulator has launched a feature called voluntary lock in or debit freeze to improve the security of investments.
Under this system, investors can digitally lock their mutual fund investments. This works much like keeping valuable items in a locker for safety. Once activated, the lock ensures that no one can withdraw money or transfer funds without the investor’s permission.
Mutual fund transactions are now largely done through mobile apps and online platforms. This digital convenience has increased access for investors. However, it has also raised concerns about cyber fraud and unauthorized transactions. Therefore, SEBI introduced the debit freeze option as a safety measure.
If someone tries to hack an account or make an unauthorized transaction, the debit freeze can block such activity. Once an investor freezes the folio, no transaction can take place. The account remains inactive until the investor unlocks it again.
Meanwhile, the regulator has made the feature available to a wide range of investors. It is not limited only to people who hold demat accounts. Investors who have directly invested with fund houses can also use the voluntary lock in facility.
The process to use this feature is simple. Investors can lock or unlock their mutual fund folios through a digital platform called MF Central. However, certain requirements must be met before using the facility.
Investors must complete their KYC details for the folio. In addition, they must update their mobile number and email address. These details are important because authentication messages will be sent when the lock or unlock request is made.
SEBI announced that the new rule will come into effect from April 30. The move aims to strengthen digital safety in mutual fund investments. At the same time, it gives investors more control over their accounts and helps reduce the risk of cyber fraud.
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