Mutual Fund investors can now lock folios: SEBI introduces voluntary debit freeze facility

The facility will allow investors to lock their mutual fund folios, ensuring that no units can be debited until the folio is unlocked.

The new rule will come into effect from April 30, 2026.

Access through MF Central platform

In the first phase, the facility to lock mutual fund folios will be made available to investors through registrars and transfer agents (RTAs) via the MF Central platform.

According to SEBI, the facility will be available only to KYC-compliant investors who have a valid email ID and mobile number registered with their folios.

An interoperable RTA platform, MF Central, was introduced to enhance the investor experience for mutual fund transactions and service requests.

AMFI to define operational process

Industry body Association of Mutual Funds in India (AMFI) will prescribe the detailed process for locking and unlocking folios for all asset management companies (AMCs) and RTAs after consultation with the regulator.

AMFI has also been asked to specify the list of financial and non-financial transactions that will be permitted during the lock-in period.

“The detailed process of opting for such a facility and the impact on different financial transactions and non-financial transactions during the lock-in period shall be disclosed by all AMCs and RTAs on their websites and in the Statement of Additional Information,” Sebi said.

The move aims to strengthen investor protection and enhance digital security for mutual fund holdings.