SEBI bans pooling of MFs by MFs

@nithin @Bhuvan how this affects ZERODHA/Coin?

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Great news for investors as the money will come directly to the bank account similar to what the regular brokers do such as Icici Direct. I have no clue about zerodha process, but I always thought, pooling money was one of the way the discount brokers would earn their income as most of the service is offered free i.e float money with the discount brokers for a day would enable them to earn interest on the float money.

Disc: Not an expert

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Interesting.

@nithin
No reply from Zerodha team yet!!

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Currently, the money in the trading account can be used to purchase MF, but this will have to change to moving money from the bank account directly. A few things that can get affected is the easy start/stop SIP or step-up SIP, we will now have to rely on the AMC SIPs. We are still waiting for some clarity around this.

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Dear @nithin

Will this new policy disrupt the MF collateral that is currently pledged for F&O margin? In case of a margin call, if the broker has to sell the MF units that are pledged, but, the proceeds hit the bank account and not the broker ledger, what will the broker do?

Thanks

The broker will have to invoke the pledge, move the security to the broker’s own account and then redeem. The process will definitely get complicated.

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I certainly hope that the SIP and order placement approach of Coin has minimal impact. It’s significantly more convenient in Coin as compared to other apps.

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