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Paytm Money’s BSE StAR Integration and related SEBI regulations8 min read

July 4, 2022
Paytm Money’s BSE StAR Integration and related SEBI regulations

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Paytm Money’s BSE StAR Integration and related SEBI regulations8 min read

Timeline extended for Direct Mutual Fund Regulatory Requirements

Last Date: 31st October, 2022

Thank you for being a valuable member of the Paytm Money family. It is because of your consistent, determined efforts towards growing your wealth every month that we have become one of the largest Direct Mutual Fund distribution platforms in the country. 

Since its launch in 2018, Paytm Money has been the choice of 3 million Direct Mutual investors and has facilitated more than 60 million transactions till date. We are extremely grateful to these investors who appreciated our transparency and recognized our efforts in helping them gain 1% higher returns by investing in Direct Mutual Funds. The platform currently services retail users in close to 99% of pincodes across India.

Paytm Money is now in the process of integrating with BSE StAR, the largest Mutual Fund execution platform in the country. This integration is necessary for us to continue providing Direct Mutual Fund services to our investors under our broking code. 

Earlier, Paytm Money was offering Direct Mutual Fund execution and advisory services on its in-house technology platform under an RIA code, in accordance with SEBI regulations. Further to discontinuation of its advisory services in April 2021, Paytm Money has now decided to offer only execution services for Direct Mutual Funds  using stock broking code from July 2022.

The technology backend shift from a RIA code to StockBroker code on BSE StAR requires creation of a UCC (Unique Client Code) and the UCC regulations of SEBI require users to mandatorily have a demat account.  

In simple terms, all our Direct Mutual Fund investors are required to provide additional information as part of their KYC, and register themselves as broking clients with Paytm Money by opening a Demat account. A UCC (Unique Client Code) code will be generated post Demat account opening to facilitate Direct Mutual Fund transactions on BSE StAR. This process is necessary to ensure continuance of Direct Mutual Fund SIPs on the BSE StAR platform and stay compliant as per SEBI regulations. 

To continue using Paytm Money app as before, Direct Mutual Fund investors have to just take a few simple steps to update their account

  1. Submit a clear picture of their signature 
  2. Click a live photo on the Paytm Money app as a part of their KYC 
  3. Complete e-sign to open a free Demat a/c 

These steps have all been enabled through a 100% digital flow on the Paytm Money app and are completely FREE of cost for all Direct Mutual Fund investors.

Click here to update KYC 

Ensure compliance with SEBI Regulations by 31st October, 2022

Our integration with BSE StAR will have no impact on your existing Mutual Fund investments and you will be able to access the same on our platform, once you complete the SEBI requirements. There will not be any change in the way the units are held today, i.e. in a statement of account (SoA) form, and they will not be dematerialised. The Demat account opening is a mandatory step only as per regulatory requirements.

The last date to complete the mandatory steps on Paytm Money app is 31st October, 2022. In the event of your failing to comply with SEBI regulations by 31st October, 2022, future investments in Direct Mutual Funds, including SIPs, will be stopped.

Please note, if you are a Direct Mutual Fund investor on Paytm Money and have a Demat account with us, you will not be required to take the above mentioned steps. 

You reach us on 0120-4786105 or write to priority.kyc@paytmmoney.com for clarifications or any support anytime along the way.

Thank you for your continued support and we look forward to welcoming you on our new Direct Mutual Fund platform!

FAQs

Why do I need to update my KYC/ Upgrade my account?

Earlier, Paytm Money was offering Direct Mutual Fund execution and advisory services on its in-house technology platform under an RIA code, in accordance with SEBI regulations. Further to discontinuation of its advisory services in April 2021, Paytm Money has now decided to offer only execution services for Direct Mutual Funds using stock broking code from July 2022.

The technology backend shift from a RIA code to StockBroker code on BSE StAR requires creation of a UCC (Unique Client Code) and the UCC regulations of SEBI require users to mandatorily have a demat account.  

We would require a couple of details from you in addition to what you provided as part of your initial KYC on our platform and need to submit them to the exchanges to upgrade your account to continue being compliant. 

For your convenience, this entire process has been simplified and is 100% digital on the Paytm Money app. It is absolutely FREE of any charges. We assure you that it will not take more than a few minutes to complete it.

What exactly do I need to do to stay compliant?  

You need to provide a couple of details in addition to what you have already submitted while completing your initial KYC with us and open a Demat account on Paytm Money by completing the e-sign process. We are providing the Demat account completely FREE of charge.

Details required: 

  1. Upload a clear image of your signature on white paper

  2. Click a live photo via Paytm Money app

  3. Complete e-sign to open a free Demat a/c 

The process is 100% digital and will not take more than a few minutes to complete. Click here to update your KYC

Is it mandatory?

Yes.

Direct Mutual Fund investors on the BSE StAR platform need to register with us as a broking client by opening a Demat account to continue investing in SIPs. The technology backend shift from a RIA code to StockBroker code on BSE StAR requires creation of a UCC (Unique Client Code) and the UCC regulations of SEBI require users to mandatorily have a demat account.

We would require a couple of details from you in addition to what you provided as part of your initial KYC on our platform and we need to submit them to the exchanges to upgrade your account.

What’s in this for me?

On completion of this integration, you will have access to a lot more Direct Mutual Fund schemes, enhanced features and whole new Direct Mutual Fund experience on the Paytm Money app. The BSE StAR platform has been scaled over the years to handle transactions of high volumes and currently processes close to 2 Cr transactions per month and growing.

By when should I complete this process?

The last date to complete the mandatory steps on Paytm Money app is 31st October, 2022. In the event of your failing to comply with SEBI regulations by 31st October,2022 future investments in Direct Mutual Funds, including SIPs, will be stopped as per our mandated guidelines.

It will just take a couple of minutes, we encourage you to take action right away. Click on this link to get started.

Will I have to pay any charges associated with the Demat account?

Demat account opening is completely free and you will not be charged at any point during this process of account upgrade on Paytm Money. You will only be charged once you choose to add funds to your Demat account to place a trade. All the trading related charges detailed on this blog will only apply once you choose to trade from your Demat account.

How do I opt out of this process?

As the integration process has no impact on your current Direct Mutual Fund investments, we urge you not to lose out on the financial growth that you have achieved with your diligence by investing every month.

In case you would still prefer to opt out, you can place a redemption request for your investments on our platform, which will be processed in 3 trading days.  Alternatively, you can redeem the same from AMC or RTA directly.

What will happen to my investments in case I don’t complete the steps?

In the event of your failing to update your KYC by 31st October, 2022 future investments in Direct Mutual Funds, including SIPs & redemption, will be stopped on Paytm Money. You will still be able to access your portfolio and view the status of your investments till date. Any further action on your past investments would have to be initiated on the respective AMC’s website by you.

What if I want to initiate this process after 31st October, 2022?

You can choose to initiate this regulatory process post 31st October, 2022 as well but till the time you do so, your SIP’s will be  stopped and any other activity on your existing investments like redemption will be restricted on Paytm Money platform. We encourage you to complete this process before 31st October, 2022 to not miss out on the growth streak that you have achieved with your investments so far.

Will I be able to continue investing in Direct Mutual Funds post this integration with BSE StAR?

Yes, we are integrating with the BSE StAR platform to continue scaling our Direct Mutual Fund services and provide your more schemes and features as a part of these offerings. There will be no impact on your existing Direct Mutual Fund investments on Paytm Money and you will be able to access the same on our new platform, once you complete the SEBI requirements. You will also have the option of choosing from more Direct Mutual Fund schemes once our integrating is complete.

Will my Direct Mutual Fund investments be in SOA or Demat form post integration?

Your Direct Mutual Fund investments will continue to be in SOA format on the BSE StAR platform. We require you to open a Demat account to generate an UCC to enable us to execute the transactions under our broking code, as per the SEBI requirement.