Investors who invest in mutual funds through demat accounts may soon find it easier to withdraw and transfer money. Securities and Exchange Board of India (SEBI) is working on a new system to simplify this process, so that investors will not need to give repeated instructions. In a consultation paper released on February 5, 2026, SEBI has proposed to introduce automated standing instructions. It also aims to bridge the gap between demat and Statement of Account (SOA) modes, allowing features like Systematic Withdrawal Plan (SWP) and Systematic Transfer Plan (STP) to work automatically without any manual intervention. Currently, demat account holders have to submit a fresh request every time they want to withdraw money or transfer funds.
Which investors will benefit most?
If SEBI decides to implement this new system, it will directly benefit those who depend on regular income from mutual funds. Retired people, investors relying on systematic withdrawal plans and long-term investors will find this especially helpful. They will no longer need to fill forms or submit separate requests to withdraw money every month or at regular intervals. The automatic system will ensure that the money is automatically credited to their account on time, reducing hassles for investors and making the process easier.
Facility without power of attorney
Currently, many investors give power of attorney to their broker for convenience, which reduces their direct control over their investments. SEBI wants standing instructions to be directly integrated into the depository system to ensure that investors retain control over their funds. Simplifying this process is expected to make the transaction smoother. SEBI believes that this step will give investors more control over their money. However, no date has been fixed yet for its implementation.