Auto Cancellation of SIPs

Uniform timeline for auto cancellation of plans due to failed installments

References

SEBI Circular

As per SEBI circular SEBI/HO/OW/IMD/IMD-SEC1/P/2024/270/1 dated 3rd January 2024, AMCs are required to follow common practice to allow "number of failed instalments" for a purchase plan. This change is expected to be live by April 1st, 2024.

Changes in FP

Frequency specific installments cancellation limit
FP Frequency No. of consecutive failed installment limit as per SEBI Remark
daily 3 Currently, limit applicable for systematic plan only
day_in_a_week 3 Currently, limit applicable for systematic plan only
four_times_a_month 3 Currently, limit applicable for systematic plan only
day_in_a_fortnight 3 Currently, limit applicable for systematic plan only
twice_a_month 3 Currently, limit applicable for systematic plan only
monthly 3 Currently, limit applicable for systematic plan only
quarterly 2 Currently, limit applicable for systematic plan only
half-yearly 2 Currently, limit applicable for systematic plan only
yearly 2 Currently, limit applicable for systematic plan only

  1. FP will mark a purchase plan as cancelled automatically if the plan is systematic and the number of consecutive failed\skipped instalments is more than the limit suggested by SEBI. Purchase plan will also have a cancellation_code attribute with value as consecutive_failed_installment_limit_exceeded.

  2. We recommend you to make a note of these limits if you are skipping installments from your front end application.

  3. More importantly, we recommend you to keep the investors informed about auto cancellation of the plans via notifications every-time an installment is skipped\failed or when the plan is cancelled due to consecutive installment failures.

FP API changes for cancelling the installments

  1. Purchase plan skip instruction

    1. End date (skip instruction object attribute to) is mandatory for systematic plans
    2. While creating a skip instruction, FP will validate that the total number of installment to be skipped within from & to date is at least 1 less than the no. of installments that can be skipped as per the SEBI regulation applicable for the frequency of the purchase plan
    3. API endpoint POST /v2/mf_purchase_plans/:id/skip_instructions

  2. SIP modify API (Deprecated)

    1. FP will validate that the consecutive installments cancelled is within the no. of installments that can be skipped as per the SEBI regulation applicable for the frequency of the SIP
    2. Eg: Investor had cancelled last 2 installments of a monthly SIP consecutively. In this case, investor cannot cancel the 3rd installment.
    3. API endpoint PATCH /api/oms/investment_accounts/:id/orders/sips/:id