This week we address questions on non-financial transactions, the different types of such transactions and how some of them can be carried out. We take the two most common changes that are requested viz. change of address / change in bank mandate.

What is a non financial transaction?

A non financial transaction is one which does not involve any unitization and has no financial impact.

What are the different types of non-financial transactions?

Any change to the folio details; addition / corrections in the available data are deemed to non-financial in nature. Some of them are- change in bank mandate, change of address, addition/ deletion in the name of the nominee, correction in email IDs, addition/ correction of contact details, change in the financial advisor and corrections in data capture in name or address.

How does an investor do these changes?

The investor needs to write to the Fund house or the Registrar & Transfer (R&T) agency to carry out these changes.

Is a written request a must?

Yes, a written duly signed request is a must. If the investor is a IPIN holder, then some R&Ts allow for requests to be placed on line. Else if the email ID is registered with them, an email would suffice to place such requests.

Is there a specific format to carry out these changes?

Yes, there is a specific format that is given on the reverse of the account statement. Some fund houses have separate formats to facilitate such requests, however, investors can write to the R&T / Fund house even on a plain sheet of paper specifying the change to be carried out and all these requests must be duly signed by all the holders.

How does one do a change in bank mandate?

Changes in bank mandate can be done by: giving a letter; enclosing a copy of the cheque (duly cancelled). It is even better to have the cheque which has the names of the holders printed. A copy of the bank statement can also be given as a proof.

What happens when the change in bank mandate is given along with the redemption request?

As per the recent AMFI best practices, for any change in bank mandate that is given along with the redemption, there is a cooling period of 10 days after which the redemption is sent out to the investor. In the interim, letters are sent to the investors informing them about the changes.

However, if there is a cheque copy and the account statement from the bank that is attached; then the amount can be released as per the norms practiced by the fund house.

Therefore, it is always better to enclose these documents when there is a change in bank mandate given along with the redemption or alternatively, inform the fund house well in advance of such change to avoid any delay in receipt of the payment.

A change in address is usually given by means of a letter duly signed by the investor / all holders. After the KYC has become mandatory, all such requests must be routed through CDSL Ventures (CVL) only and fund houses ensure that the name and address is captured in the records as per the KYC norms and as it appears in the CVL records.

What about investors who are not KYC compliant?

If an investment was made in the period prior to the KYC becoming mandatory, then the fund house R&T will carry out the changes in their books upon receipt of the signed letter; however, any fresh investments will be done only if the investor is KYC compliant.

Also any correction in address will have to be done through CVL only and all addresses will be captured as per the KYC norms only.

(The author is CEO, Sundaram BNP Paribas Fund Service.)

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