The Securities and Exchange Board of India (Sebi) has sought responses to its ‘small-ticket systematic investment plan’, or the Rs 250 SIP, proposing that a part of the cost, incurred by asset management companies (AMCs), along with certain incentives, be compensated from the Investor Education and Awareness Fund.
“Industry participants involved in the mutual fund space have agreed to offer discounted rates to enable faster break-even for AMCs,” a consultation paper released on Wednesday noted.
The regulator estimates this would help AMCs, incurring the costs, reduce the break-even time to within two years and encourage further penetration.
Sebi has also proposed that the Rs 250 SIP be offered under the ‘growth option’ of the plan. The small-ticket SIPs that an investor can start may be restricted to three SIPs (one each in up to three asset management companies). AMCs can continue to offer Rs 250 SIPs beyond three small-ticket SIPs, but the discounted rates offered by intermediaries are restricted to only first three Rs 250 SIPs, the paper said.
Investors would be able to pay for small-ticket SIPs only through the National Automated Clearing House mandate and Unified Payments Interface auto pay, the paper noted. To ensure the benefits are directed at new and small investors, all existing investors, or investor with any SIP other than small ticket, or those making lump sum investments, are excluded from this category.
“While the number of investors participating in mutual funds has grown steadily over the years, there is a considerable opportunity for increasing the reach of mutual funds to all sections of the society, to enable every individual to have access to this financial product,” Sebi said.
The proposed ‘sachetisation’ of mutual funds is aimed at promoting financial inclusion and systematic savings, along with facilitating investment of small savings by investors new to mutual funds. Comments and suggestions can be shared with the regulator by February 6, 2025.
» Read More
