Sebi makes OTP validation a must for mutual fund investments from FY24

The Securities and Exchanges Board of India (Sebi) has extended the two-factor authentication rule presently applicable on mutual fund (MF) redemptions to include MF subscription transactions as well.

According to a circular issued by the markets regulator on Friday, investors will have to authenticate new investments in mutual funds through a one-time password from April 1, 2023. For offline transactions, the validation will happen through signature.

The watchdog has asked the Association of Mutual Funds in India (Amfi) to prepare a schedule for implementation of the new rule by October 14 and also send a bi-monthly progress report from December 2022.