Aditya Birla SL Arbitrage Fund - Dir (G)

The Securities and Exchange Board of India (SEBI) has introduced a voluntary debit freeze facility for mutual fund folios to strengthen investor security.

The feature will allow investors to lock their holdings and prevent any debit transactions such as redemptions or transfers. The circular will take effect from 30 April 2026.

The facility will apply to both demat and non-demat mutual fund folios. Investors will initially be able to activate the lock through the MF Central platform. Once activated, no units can be redeemed or transferred until the folio is unlocked by the investor.

MF Central is an industry platform jointly managed by Computer Age Management Services and KFin Technologies. The feature will initially be available only to KYC-compliant investors with registered mobile numbers and email IDs.

SEBI has tasked the Association of Mutual Funds in India (AMFI) with defining the operational framework. AMFI will outline the process for locking and unlocking folios and specify which transactions remain permitted during the freeze period.

Asset management companies and registrars will disclose operational details on their websites and in scheme documents.

The measure adds a security layer for mutual fund investors. It is designed to reduce the risk of unauthorized transactions and fraudulent redemptions.

The mechanism is similar to debit freeze facilities already available in bank and demat accounts.

The Securities and Exchange Board of India (SEBI) has allowed actively managed equity mutual funds to invest part of their residual allocation in gold and silver instruments.

The limit is up to 35% of assets and also includes units of infrastructure investment trusts.

This expands the range of non-equity assets available to fund managers.

Under the revised framework, equity schemes can deploy surplus allocations beyond core equity exposure into precious metals.

These investments will typically be made through ETFs or related instruments. Earlier, this portion of the portfolio was largely parked in cash, liquid securities, or money-market instruments.

The change gives fund managers an additional tool to manage volatility and diversify portfolios.

Gold is widely used as a hedge during market stress. Silver offers both safe-haven characteristics and exposure to industrial demand.

Media reports suggest that most funds are expected to use this newly granted flexibility selectively. Allocations to metals are likely to remain small and tactical.

As a result, the overall risk–return profile and equity orientation of most schemes is unlikely to change materially.

The facility will be available for both demat and non-demat folios and will initially be offered through the MF Central platform, an interoperable registrar and transfer agent (RTA) system designed to streamline mutual fund service requests.

According to the circular issued on 6 March 2026, the debit freeze option will be available only to investors who are KYC-compliant and have both a registered email ID and mobile number. Investors will be able to activate the lock through RTAs via the MF Central platform in the first phase.

SEBI said the Association of Mutual Funds in India (AMFI) will prescribe the detailed procedure for locking and unlocking folios and define the list of financial and non-financial transactions that may be permitted during the freeze period. Asset management companies and RTAs will also be required to disclose the process for opting into the facility and its implications on their websites and in the Statement of Additional Information.

The circular will come into effect from 30 April 2026. SEBI said the measure has been introduced to safeguard investor interests and strengthen the security framework for mutual fund investments.