#SEBI #MFDIncentives #FinancialInclusion #B30Cities #WomenInvestors #MutualFunds #Investment
Chandigarh: – In a significant move aimed at deepening financial inclusion and broadening the retail investor base in India, the Securities and Exchange Board of India (SEBI) has introduced a revamped incentive structure for Mutual Fund Distributors (MFDs).
The new framework, which will be implemented starting February 1, 2026, allows fund houses to pay MFDs an additional incentive of up to ₹2,000 for bringing in new investors from under-penetrated regions and for promoting gender diversity in investing.
🎯 Who Qualifies for the Incentives?
SEBI has carefully narrowed the eligibility criteria, focusing the incentives on completely new individual investors (defined at the PAN level) to ensure the growth of the overall investor base:
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New individual investors from B-30 cities (Beyond Top 30 cities).
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New women individual investors from both T-30 (Top 30) and B-30 cities.
This revised structure replaces the earlier B-30 incentive framework, which was discontinued following concerns over misuse and inconsistent implementation.
💸 The New Payout Structure (Capped at ₹2,000)
SEBI has standardized the incentive model across all Asset Management Companies (AMCs) to ensure uniformity:
| Investment Mode | Commission Structure | Conditions |
| Lump-sum Investments | 1% of the first application amount | Investor must stay invested for a minimum of one year. |
| Systematic Investment Plans (SIPs) | 1% of the total first-year SIP contributions | Investor must stay invested for a minimum of one year. |
In both cases, the commission is strictly capped at ₹2,000 per eligible new investor.
🛡️ Source of Funding and Guardrails
In a major structural shift, SEBI has mandated that these additional incentives will be funded from the 2-basis-points (bps) corpus that AMCs are already required to set aside annually for investor education and awareness. This ensures the payout does not impact the scheme’s expense ratio (Total Expense Ratio or TER).
To prevent misuse, SEBI has also included a “No Dual Incentives” clause:
Distributors cannot claim incentives twice for the same woman investor. If she is from a B-30 city, only one category (either ‘B-30’ or ‘women’) can be used for claiming the incentive.
🚫 Schemes Excluded from the Incentive
The incentives will not apply to certain categories of schemes, aligning with SEBI’s goal of encouraging long-term participation and discouraging short-term transactions:
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Exchange Traded Funds (ETFs)
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Domestic Fund of Funds (FoFs) with over 80% AUM in domestic funds
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Short-duration schemes with less than one year maturity, including Overnight Fund, Liquid Fund, Ultra Short Duration Fund, and Low Duration Fund.
The Association of Mutual Funds in India (AMFI) has been tasked with publishing detailed implementation standards within 30 days to ensure smooth and uniform adoption across the industry. SEBI has further clarified that changes to scheme offer documents due to this revised structure will not be considered a Fundamental Attribute Change.
#SEBI #MFDIncentives #FinancialInclusion #B30Cities #WomenInvestors #MutualFunds #Investment
