By Mr. Yaseen Sahar, Financial Expert
Mutual Fund Agents to get an incentive of Rs.500 for bringing in Rs.250 SIP from new investors: SEBI
In
a consultation paper, Securities and Exchange Board of India (SEBI) has
proposed introduction of micro-SIP (micro - Systematic Investment Plan) of
Rs.250 in mutual funds to increase the penetration of mutual funds.
In
addition, SEBI has also proposed introduction of an incentive of Rs.500 for
Mutual Fund Distributors (MFDs) and execution only platforms for bringing in
SIP of Rs.250. However, MFDs are allowed to get such a compensation after
completion of 24 installments of SIPs.
Also,
MFDs will have to bring in new investors to get this compensation.
SEBI
said that AMCs can give this incentive from the IAP budget with AMFI &
AMCs.
Such
an SIP can only be made in equity and hybrid (growth option) plans. However,
investors can not start micro-SIP in debt funds, sectoral / thematic funds, mid
cap funds and small cap funds.
In
addition, RTAs, exchange platforms and depositories will have to offer discount
for such an SIP.
Here are
other key highlights of the new proposals:
·
Investors
can do up to 3 SIPs of Rs.250 across three fund houses (One each)
·
Investor
commitment should be for 5 years (60 installments) but early withdrawals will
be allowed
·
MFDs
cannot charge transaction fees for bringing in micro-SIP investors
·
Incentive
will be given only for first SIP per investor at industry level i,e. Rs. 500
per investor
·
Investors
can use NACH and UPI auto-pay for micro-SIP
KYC details
·
Mobile
number mandatory for all investors
·
Email
ID optional but recommended
·
All
updates will be sent via SMS or email
·
KYC
costs will be managed through IAP corpus
·
PAN
card not mandatory for investments up to Rs 50,000 per year per mutual fund.
However, Aadhaar needed if investing without PAN
·
Investors
can choose monthly or fortnightly SIP options
SEBI
said, “With subsidised charges offered by intermediaries and reimbursement of
certain costs from the Investor Education and Awareness Fund, it is expected
that cost of small ticket SIP of an investor new to Mutual Fund industry would
break-even for the AMCs within two years. Accordingly, it is expected
that AMCs would actively pursue this objective of financial inclusion.”
You
can share your feedback on this consultation paper by February 6, 2025 by
visiting this link.
Mr. Yaseen Sahar has been reached at rahas84@gmail.com and 98433 13512
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme
related documents carefully. The past performance of the mutual funds is not
necessarily indicative of future performance of the schemes.
