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New Facility for Purchase and Redemption of Units of HDFC Mutual Fund Schemes Through Stock Exchanges New Facility for Purchase and Redemption of Units of HDFC Mutual Fund Schemes Through Stock Exchanges
 
What is this new facility?
  This new facility enables transactions (purchase/redemption) of units of HDFC Mutual Fund Schemes through the Stock Exchange infrastructure. This will enable to expand the reach of mutual fund schemes to more towns and cities.
Is this new facility available only to new investors?
  No. This new facility i.e. purchase/redemption of units is available to both existing unit holders and new investors.
Will the folio be the same in case of units held in physical and demat mode?
  Separate folios will be allotted for units held in physical and demat mode.
Are the units of the eligible schemes of HDFC Mutual Fund listed on BSE & NSE? Can the units be traded on the stock exchange(s)?
  No, the units of eligible Schemes of HDFC Mutual Fund are not listed on BSE & NSE and the same cannot be traded on the Stock Exchange.
Where does the investor go to transact in units of HDFC Mutual Fund Schemes through the stock exchange?
  The investor has to approach a Trading Member of Bombay Stock Exchange ("BSE") or National Stock Exchange ("NSE") (who is registered with AMFI as Mutual Fund Advisor and who has signed up with HDFC Asset Management Company Limited and also registered with BSE & NSE as Participant) for availing this facility.
Does the trading member of BSE or NSE have to be AMFI certified or empanelled with HDFC Asset Management Company Limited ("HDFC AMC") or registered with BSE & NSE to offer this facility?
  Yes the trading member has to have an AMFI Registration Number (ARN) and has to be empanelled with HDFC AMC and also registered with BSE & NSE as Participant to offer this facility.
The units can be purchased/redeemed only if the investor has a demat account?
  No. The units transacted through the stock exchange can be purchased and redeemed in the demat as well as the physical form, as per the choice of the investor.
Which schemes can be purchased or sold through this route?
Currently there are select equity and debt schemes (eligible schemes), which can be purchased and redeemed through this route. There are totally 20 eligible schemes, which are available as of now. Please refer to the Addendum dated December 3, 2009 Introduction of New Facility for Purchase/Redemption of Units through Stock Exchange(s) for the complete list of such eligible schemes. The list of eligible schemes is subject to change from time to time.
Which schemes can be purchased or sold through this route?
Currently there are select equity and debt schemes (eligible schemes), which can be purchased and redeemed through this route. There are totally 20 eligible schemes, which are available as of now. Please refer to the Addendum dated December 3, 2009 Introduction of New Facility for Purchase/Redemption of Units through Stock Exchange(s) for the complete list of such eligible schemes. The list of eligible schemes is subject to change from time to time.
Is there any limit for value of transactions, which can be done through this route?
  Currently transactions i.e. purchase and redemptions of less than Rs 1 crore can only be done through this route. For physical transactions the maximum redemption amount is Rs 1 lac per folio per day. Please refer to the circulars issued by NSE and BSE respectively for details on the same.
What is the electronic platform offered by NSE for this facility called?
  The electronic platform is called Mutual Fund Services System (MFSS).
What is the electronic platform offered by BSE for this facility called?
  The electronic platform is called Bombay Stock Exchange Platform for Allotment and Redemption of Mutual Funds (BSE StAR MF)
Does the investor have to sign any documents with the trading member?
  There is a letter to be signed and provided by the investor to the trading member for registering for this facility. This letter also contains the terms and conditions of the MFSS/BSE StAR MF facility.
What documents are required for purchase of units through this facility in the physical mode?
  Investor who chooses physical mode has to submit the following documents/details along with clear funds to the Trading Member:
  • Completed and Signed respective scheme Application Form
  • Copy of PAN Card of first holder
  • Copy of PAN Card of each additional holder in case of joint investment
  • Copy of KYC acknowledgement form of all holders
  • Copy of Guardians PAN Card in case investment is on behalf of minor
  • Folio No. in case the subscription is an additional purchase.

What confirmation will the investor get for the order placed through the trading member?
  The investor will receive from the Trading Member a confirmation slip (which will contain unique confirmation number and date and time stamp of order entry) generated from the MFSS/BSE StAR MF system. Till the Trading Member provides allotment details to the investor, the order confirmation slip would be the proof of the transaction. In addition, for physical mode, the investor will receive Statement of Account from the Registrar & Transfer Agent (RTA) directly.
In whose favour will the cheque for purchase have to be made by the investor?
  The cheque has to be made in favour of the trading member, as the trading member has to fulfill the payment obligation with the stock exchange/Clearing Corporation.
What documents are required for making a purchase in the demat mode?
  Investor who chooses depository mode can place order for subscription as currently followed for secondary market activities. The investor should provide their depository account details along with PAN details to the member. When investor desires to hold units in dematerialised form, KYC performed by DP will be considered compliance with applicable requirements specified in this regard in terms of SEBI circular ISD/AML/CIR-1/2008. This is in accordance with SEBI circular no SEBI/IMD/CIR No.11/183204/2009 dated November 13, 2009.
What confirmation will the investor get for the purchase order placed through the member in demat mode?
  The investor will receive from the Trading Member a confirmation slip (which will contain unique confirmation number and date and time stamp of order entry) generated from the MFSS/ BSE StAR MF system. Till the Trading Member provides allotment details to the investor, the order confirmation slip would be the proof of the transaction. In the case of demat mode, demat statement given by depository participant would be deemed to be adequate compliance of the requirement of Statement of Account as specified in SEBI circular number SEBI/IMD/CIR No.11/183204/2009.
What is procedure for submitting redemption in the physical mode?
  Investor who chooses physical mode has to submit the following documents/details to the Trading Member:
  • Completed and Signed redemption request stating the Folio no.
  • Copy of PAN Card of first holder
  • Copy of PAN Card of each additional holder in case of joint investment
  • Copy or allotment statement / holding statement/ SOA displaying the scheme holdings to be redeemed
  • Copy of Guardians PAN Card in case investment is on behalf of minor
Who will verify the signature on the redemption slip?
  The member shall verify the application for mandatory details, investor identity and verifies the signature on the application against the PAN signature.
What confirmation will the investor get for the order placed through the trading member?
  The investor will receive from the Trading Member a confirmation slip (which will contain unique confirmation number) generated from the MFSS/ BSE StAR MF front-end system. This will be the proof of the transaction for the investor till the redemption proceeds are received from the RTA.
Where will the investor receive the redemption proceeds through the physical mode?
  The redemption proceeds will be directly sent by RTA through appropriate payment mode such as direct credit, NEFT or cheque as decided by AMC from time to time, as per the bank account details recorded with the HDFC Mutual Fund.
Who is responsible for the processing of the redemption accurately?
  It would be the primary responsibility of the trading member to ensure completeness of the documents including ensuring filling up of the all Key fields by the investor before accepting the same for processing. It would also be the responsibility of the trading member to ensure identity and authentication of signature affixed based on the original PAN shown at the time of accepting the redemption application form. A copy of the PAN will be sent along with the redemption request. In case of joint holding, this will be ensured by the trading member for all holders. In case the subscription application form has not been reached to the RTA, the redemption request for such subscription will not be taken by the RTA and shall be rejected.
What is the procedure to submit the redemption of units in demat form?
  In case units are held in physical mode, the investor should ensure that the units are converted from physical mode to demat mode prior to placing of redemption order. Investor who chooses depository mode can place order for redemption as currently followed for secondary market activities. The investor should provide their depository account details along with PAN details to the Trading Member. The investor should also provide their Depository Participant with Depository instruction slip with relevant units to be credited to Clearing Corporation pool account same day before 4.30 p.m.
Where will the investor receive the redemption proceeds through the demat mode?
  The redemption proceeds will be credited to the bank account of the investor, as per the bank account details recorded with the Depository Participant.
What are the timings for putting orders, which are valid for the same day NAV?
  Currently, the timing for entering the orders on the respective platforms are between 9.00 a.m. to 3.00 p.m. The applicability of NAV will be subject to guidelines issued by SEBI on Uniform cut-off timings for applicability of NAV of Mutual Fund Scheme(s)/Plan(s).
Can an investor do a switch transaction through the stock exchange?
  No. Switching of units cannot be done through this platform. Only purchase and redemption transactions can be done currently through this platform.
Can an investor enroll for a Systematic Investment Plan (SIP) though this platform?
  Yes. SIP transactions can be done through this platform.
Is reinvestment and payout available as an option under the dividend option in the eligible schemes through this route?
  Yes. Dividend Reinvestment Option and dividend payout option is available as an option under the dividend option in the eligible schemes wherever it is available.
Will the purchase/redemption applications submitted to the trading member for this facility comply with the requirement of submitting applications only at Official Points of Acceptance (OPA)?
  Yes, the eligible trading members will be considered as Official Points of Acceptance (OPA) of HDFC Mutual Fund.
How does an investor Dematerialize units?
  In case an investor desires to transfer the units held in Physical form into the Demat account , an application should be submitted to its respective Depository Participant.
How does an investor rematerailise units into physical form?
  In case an investor desires to convert the dematerialized units into physical form (represented by statement of account), an application for Rematerialization of units should be submitted to its Depository Participant.
Where can an investor submit request for change of address/bank details, etc. in case of units held in physical /demat mode?
  In case of non-financial requests/applications such as change of address, change of bank details, etc., investors should approach Investor Service Centres (ISCs) of HDFC Mutual Fund if units are held in physical mode and the respective Depository Participant(s) if units are held in demat mode.
This FAQ is dated January 1, 2011.
  Disclaimer:

This FAQ is prepared based on HDFC Asset Management Company Limited's (HDFC AMC) understanding of the New Facility for Purchase and Redemption of Units of HDFC Mutual Fund Schemes through Stock Exchange Infrastructure (the "Facility"). While utmost care has been exercised while preparing the FAQs, HDFC Mutual Fund / HDFC AMC does not warrant the completeness and absolute accuracy or completeness of this information and disclaims all liabilities, losses and damages arising out of the use of this information. The recipient alone shall be fully responsible / liable for any decision taken on the basis of this material. The recipient should before availing this Facility make their own investigation, read the terms and conditions of the Facility and seek appropriate professional advice. Please read the respective Scheme Information Document of the Scheme(s) and the Statement of Additional Information before investing.