Recently, SEBI has issued a circular for investment by minors (below the age of 18). Henceforth, such investments can only be made from the minor’s bank account or a joint account of the minor and the guardian. Here guardian includes a parent or a legal guardian. This is contrary to the earlier practice wherein the investment from the guardian’s account was also accepted.

As per the circular, the minor must update his / her KYC and bank account details (including providing an original cancelled cheque) on attaining majority (18 years). Unless this is done, no further transactions will be allowed in the account and all standing instructions pertaining to Systematic Investment Plans (SIPs), Systematic Withdrawal Plans (SWPs) and Systematic Transfer Plans (STPs) will be suspended.