Mumbai, India — February 6, 2026
Market regulator Securities and Exchange Board of India (SEBI) has proposed expanding the availability of Systematic Withdrawal Plan (SWP) and Systematic Transfer Plan (STP) facilities for mutual fund units held in demat form, a move aimed at improving operational efficiency and ease of doing business for investors.
Currently, permanent standing instructions for SWP and STP are available only for units held in Statement of Account (SoA) mode. Investors holding mutual fund units in demat accounts are required to submit separate instructions for every transaction, creating operational inconvenience.
Two-Phase Implementation Plan
In its consultation paper, SEBI proposed implementing the expanded facility in two phases.
Phase One:
Investors will be allowed to register unit-based SWP and STP mandates through depositories or stock exchange members. Execution of these transactions will take place on stock exchange platforms, streamlining the process for demat investors.
Phase Two:
SEBI plans to permit the execution of SWP and STP instructions through Registrar and Transfer Agents (RTAs). This phase will enable:
Amount-based STPs
Appreciation-based STPs
Swing STPs and other advanced transfer options
This broader framework will provide demat investors access to the same flexibility currently available to SoA investors.
Benefits for Investors and Market Intermediaries
According to SEBI, the proposed expansion will:
Simplify operations for investors holding mutual funds in demat form
Reduce repetitive transaction-level instructions
Improve operational efficiency for intermediaries
Enhance overall ease of doing business in the mutual fund ecosystem
Public Feedback Invited
SEBI has invited public comments on the proposal until February 26, after which the regulator will evaluate stakeholder feedback before finalizing the framework.
The proposal reflects SEBI’s continued push toward harmonizing mutual fund operations across holding modes while strengthening investor convenience and market efficiency.
