Securities and Exchange Board of India
CIRCULAR
CIR/IMD/DF/10/2010 August 18, 2010
All Mutual Funds/Asset Management Companies/Trustee Companies/Boards of Trustees of Mutual Funds/All registered Stock
Exchanges/NSDL/CDSL/All registered Registrars and Share transfer Agents/AMFI
Sir/Madam,
Sub: Transferability of Mutual Fund units
1. Regulation 37(1) of SEBI (Mutual Fund) Regulations, 1996 states that “a unit unless
otherwise restricted or prohibited under the scheme, shall be freely transferable by act of
parties or by operation of law.”The spirit and intention of this regulation is not to prohibit
transferability of units as a general rule or practice. However, it is noticed that mutual fund
schemes prohibit transfer on a regular basis instead of on an exceptional basis.
2. In order to facilitate transferability of units of mutual funds held in one demat account to
another demat account, it has been decided that all AMCs shall clarify by way of an
addendum that units of all mutual fund schemes held in demat form shall be freely
transferable from the date of the issue of said addendum which shall be not later than
October 1, 2010. However, restrictions on transfer of units of ELSS schemes during the
lock-in period shall continue to be applicable as per the ELSS Guidelines.
3. This circular is issued in exercise of powers conferred under section 11(1) of the Securities
and Exchange Board of India Act, 1992, read with the provisions of regulation 77 of SEBI
(Mutual Funds) Regulations, 1996 to protect the interests of Investors in securities and to
promote the development of and to regulate the securities market.
Yours faithfully,
