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Paytm to Stop Selling Mutual Funds Through Paytm Money

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One of the biggest platforms for marketing mutual funds directly in India, Paytm Money, has made the decision to stop doing so and divert investors to its broking company with demat accounts.

Mutual fund SIPs will stop for Paytm Money
Paytm to Stop Selling Mutual Funds Through Paytm Money

One of the biggest platforms for marketing mutual funds directly in India, Paytm Money, has made the decision to stop doing so and divert investors to its broking company with demat accounts.

As part of the platform’s transition to using BSE StAR, an MF transaction platform, Paytm Money requested increased KYC (Know Your Customer) compliance from users.

Users must obtain a demat account and a unique client code (UCC) as a result of this change. Users must finish the additional KYC requirements to migrate by July 25 in order to avoid having their future investments in mutual funds, including SIPs (systematic investment plans), and redemptions, the business warned.

Using an RIA code, Paytm Money has begun providing direct mutual fund purchases on its own site. For transactions on the BSE StAR platform, investors will now have to use the broker code.

We made the decision to stop providing advisory services and were forced to stop using the RIA code in order to conduct Direct Mutual Fund transactions and utilize our brokerage code instead.

To continue offering Direct Mutual Fund services to our investors and maintain compliance with regulations, we are integrating with BSE StAR, the largest Mutual Fund execution platform in the nation.

KYC necessary to ensure continuance of SIPs

By connecting a client and the exchanges, BSE StAR, an exchange platform, needs a UCC (Unique Client Code) to enable Direct Mutual Fund transactions.

These UCCs must only be mapped to demat accounts, per SEBI regulations. All Paytm Money Direct Mutual Fund investors must comply with the market regulator’s requirements by providing additional information as part of their KYC and registering with Paytm Money as a broking customer by establishing a free Demat account.

To secure the continuation of SIPs on the BSE StAR platform, this procedure is required. This included opening a Demat account. “These required processes, including opening a Demat account, have all been facilitated through simple, 100% digital transactions on the Paytm Money app, and are absolutely FREE of cost for all investors,” it stated.

How can MF investors finish the additional KYC process?

Users need to add a few data to what they already provided while completing their initial KYC with Paytm Money and register a free demat account in order to remain compliant with SEBI laws on Paytm Money and be able to invest in SIPs in the future.

They must use the Paytm Money app to take a live photo after uploading a clear image of their signature on white paper.

Investors will have access to many more direct mutual fund schemes, improved features, and an entirely new “Direct Mutual Fund” experience on the Paytm Money app once this integration is complete.

Users may opt out of this procedure.

If a user decides they still want to opt out, they can submit a redemption request on the Paytm Money platform, and it will be handled in three trading days. As an alternative, users can redeem the same tickets straight from AMC or RTA.

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