Investor services
In this chapter: KYC, on-boarding, folio operations · SIP, STP, SWP, switches
KYC compliance via CKYC is the entry point. Once KYC, an investor opens a folio at an AMC and starts investing. SIP automates monthly investments. STP automates moving money between schemes within an AMC. SWP automates monthly withdrawals. Switches move units between schemes at NAV, taxable as redemption.
SIP variants: regular SIP (fixed monthly amount), step-up SIP (increases annually by % or amount), trigger SIP (invests on price/NAV trigger), perpetual SIP (no fixed end-date), aggressive SIP (multiple instalments per month). STP modes: fixed-amount (transfer ₹X per month), fixed-units (transfer X units per month), trigger-based. Most STPs are used to deploy a lump sum gradually into equity to reduce timing risk. SWP is the inverse — used by retirees for monthly income, ideally at a withdrawal rate not exceeding portfolio yield + safe drawdown.
Subtle issue: SWP from an equity-oriented fund and the LTCG ₹1.25L exemption. By staggering redemptions across years, an investor can minimise LTCG tax. But SEBI prohibits aggressive harvesting solely for tax — there must be a real cash-flow purpose. A distributor advising aggressive harvesting through SWP/STP risks compliance scrutiny.