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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Investor Services

An investor wants to be able to cancel an existing SIP registered with a mutual fund. Under the usual industry practice, what is generally required to stop the SIP?

To stop a SIP, the investor submits a written cancellation request to the AMC or its registrar, usually some working days before the next instalment date. Redeeming all units is not required, and there is no compulsory minimum tenure, so the other options are incorrect.

  1. AThe investor must redeem all units held in the scheme first
  2. BThe investor must submit a written SIP cancellation request to the AMC or its registrar a few days before the next instalment dateCorrect
  3. CThe distributor alone can cancel it without informing the investor
  4. DThe SIP can be stopped only after completing the minimum tenure of five years

Explanation

SIPs can be discontinued by giving a written request to the AMC, registrar or via the online platform, normally with a notice period of some working days before the next debit date. Redeeming all units is not required, and no mandatory five-year tenure applies. A distributor cannot unilaterally cancel without the investor's instruction.

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