Equity mutual fund to shift to T+2 settlement cycle from Feb 1
Asset management companies (AMCs) will move to a shorter redemption payment cycle of T+2 for equity schemes from February 1. At present, funds are transferred to the investor’s bank account within 3 days after the completion of the redemption process.
The move is in line with the T+1 settlement cycle of equity markets to benefit mutual fund investors.
Indian equity markets moved to a T+1 settlement cycle for all stocks, shortening the settlement cycle by a day and making the availability of funds a day sooner than at present.
To pass on this benefit to mutual fund investors, it has been decided all AMCs will move to the T+2 redemption payment cycle for equity schemes, and implement this uniformly with effect from February 1, 2023, after allowing a couple of days for the settlement cycle to stabilise, Association of Mutual Funds in India (Amfi) said in a statement.