SEBI Proposes Allowing AOPs to Hold Units of MFs, Corporate Bonds, and Govt. Securities in their Own Demat Accounts
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- Last Updated on 19 October, 2024
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Consultation Paper; Dated: 16.10.2024
SEBI has proposed allowing associations of persons (AOPs) to hold units of mutual funds (MFs), corporate bonds and government securities in their own demat accounts. This would encourage the dematerialisation of securities held in physical form. AOP must be legally responsible for ensuring that they only subscribe to the financial instruments/securities that are permitted by statutes governing the AOP.
In the case of AOP, the beneficiary owner (BO) account can be in the name of AOP and securities (other than equity shares) can be held in its own name. Further, the statutes governing the AOP permit the AOP to hold securities that are being dematerialised, and only such securities that an AOP is permitted to hold must be dematerialised/subscribed in demat form. Also, the demat account must not be used to subscribe/hold equity shares.
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