SEBI has extended the standing instruction facility for Systematic Withdrawal Plans (SWPs) and Systematic Transfer Plans (STPs) to mutual fund units held in demat form.
If you hold your mutual fund investments in demat form, setting up automatic withdrawals or transfers has been more limited than for investors who hold units directly with a mutual fund. That is set to change under a new SEBI circular aimed at making these transactions easier.
The Securities and Exchange Board of India (SEBI) has announced that investors will be able to create standing instructions for Systematic Withdrawal Plans (SWPs) and Systematic Transfer Plans (STPs) for mutual fund units held in demat form.
An SWP allows you to withdraw a fixed amount or a fixed number of mutual fund units at regular intervals.
An STP lets you periodically move your investment from one scheme to another within the same mutual fund by redeeming units from one scheme and investing the proceeds in another.
Rollout will happen in two phases
SEBI has asked depositories to implement the facility in stages:
Phase | Facility | Deadline |
Phase I | Unit-based SWP/STP (fixed number of units) | 31 January 2027 |
Phase II | Amount-based SWP/STP (fixed withdrawal or transfer amount) | 30 April 2027 |
What happens next?
Depositories will act as the nodal agencies for implementing the framework. They have been directed to:
- Publish a standard operational framework by 31 October 2026.
- Make any necessary amendments to their rules and regulations.
- Carry out required system changes.
- Publish the circular details on their websites.
Although the circular takes effect immediately, the actual facilities will become available according to the implementation timelines announced by SEBI.
What does this mean for you?
This change is expected to make it easier to automate regular withdrawals or transfers between schemes of the same mutual fund if you invest in mutual funds through a demat account. This standing instruction facility was available only for mutual fund units held outside the demat system till now.
Operational details will be published by the depositories before the rollout begins.
Summary
SEBI has approved a phased rollout of standing instructions for SWPs and STPs on mutual fund units held in demat form. Unit-based transactions are scheduled to be available by 31 January 2027, while amount-based transactions are expected by 30 April 2027. Depositories will issue the operational framework before implementation.
Source: Securities and Exchange Board of India (SEBI) Circular | 17-July-2026
