Sebi introduces standing instructions for SWP, STP in mutual funds in demat holdings

Published 17 July 2026 · finance

The market regulator, Sebi, on Friday eased mutual fund investing by allowing SWP and STP standing instructions for demat holdings to facilitate ease of doing

The market regulator, Sebi, on Friday eased mutual fund investing by allowing SWP and STP standing instructions for demat holdings to facilitate ease of doing business.According to a circular, mutual Fund investors can avail the facility of SWP by creating standing instructions with mutual fund or its RTA for periodic redemption of specified number of mutual fund units or amount. Also Read | AMFI simplifies mutual fund transmission process to make claim settlement easier for nominees The investors can now avail the facility of STP by creating standing instructions for transferring their investment in one scheme of mutual fund to another scheme of the same mutual fund, by way of redemption from one scheme and subscription to the other scheme of the same mutual fund.At present, the facility of creating such standing instructions for SWP / STP mandate is not available for the mutual fund units held in demat form.

Sebi said that this move is taken post taking into account the representations received from the Depositories, recommendations of a Working Group setup by SEBI and recommendations of Secondary Market Advisory Committee of SEBI. This facility shall be implemented in two phases. In Phase - I, the facility shall be made available for “Unit-based SWP / STP” i.e. standing instructions based on a fixed number of units to be redeemed at a specified frequency for withdrawal or for purchasing units of another scheme of the same mutual fund.In Phase - II, the facility shall be extended to “Amount-based SWP / STP” i.e. standing instruction for fixed amount which is required as pay-out at a specified frequency or for purchasing units of another scheme of the same mutual fund.Further, depositories shall be the nodal facilitator for implementation of this framework and shall ensure the implementation of Phase - I by January 31, 2027 and implementation of Phase - ll by April 30, 2027.

To implement this, depositories are instructed to jointly publish a standard framework on their website to operationalize the aforesaid facility by October 31, 2026, make amendments to the relevant bye-laws, rules and regulations for the implementation of the above framework, as may be applicable/necessary; carry out system changes, if any, to implement the above framework; and lastly disseminate the provisions of this circular on their website.Also Read | Explained: Why 11 international mutual funds halted fresh SIPs and how investors can still invest globally The market regulator also said that the provisions of this circular shall come into force with immediate effect. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter.