Mutual fund investors get new safety feature as AMCs enable SEBI’s debit freeze facility

Asset Management Companies (AMCs), including Franklin Templeton Asset Management (India), have rolled out addendums to their scheme documents after SEBI introduced a voluntary debit freeze facility for mutual fund investors.

AMCs have started enabling the facility, allowing investors to lock their folios and prevent unauthorised redemptions or withdrawals.

The feature enhances account security by ensuring units cannot be debited unless the investor explicitly unlocks the folio.

ICICI Prudential Asset Management Company confirmed that the facility will be available for both demat and Statement of Account holdings, aimed at improving digital security and preventing unauthorised redemptions.

SEBI's voluntary debit freeze facility for mutual fund folios

Once activated, the folio cannot be used for any debit activity unless the investor explicitly removes the lock, giving investors greater control over access to their investments.

The initiative is aimed at strengthening investor protection, improving account security, and reducing risks linked to fraud, unauthorised access, or misuse of investor credentials.