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  • MF News MFDs to get an incentive of Rs.500 for bringing in Rs.250 SIP from new investors: SEBI

    MFDs to get an incentive of Rs.500 for bringing in Rs.250 SIP from new investors: SEBI

    Such an incentive will be given after 24 installments of contribution from new investors subscribing to Rs.250 SIP.
    Nishant Patnaik & Suhail Chagla Jan 23, 2025

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    In a consultation paper, SEBI has proposed introduction of micro-SIP 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 MFDs and execution only platforms for bringing in SIP of Rs.250. However, MFDs/EOPs are allowed to get such a compensation after completion of 24 installments of SIPs.

    Also, MFDs/EOPs 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 and AMCs.

    Such an SIP can only be made in growth plans. However, investors cannot 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 within2 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.

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

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    8 Comments
    G. M Mishra · 2 weeks ago `
    What if first time investor but amount is more??? Also if investor starts with 250rs and then starts other SIP of greater amount then also will we get this??
    Rajasekaran Thiagarajan · 2 weeks ago
    Valid doubt. I also expecting the valid answer
    Reply
    SHANKAR CHARAN Lenka · 2 weeks ago `
    First of all It is an appeal from the behalf of MFD Community that SEBI must take steps regarding B30 Special Brokerage. MFD in the initial stage has negligible commission in comparison to other Agency.Considering this We hope that SEBI must implement the previous B30 special as soon as possible. Otherwise MUTUAL FUND industry will run slowly. Investor Awareness Programme will not be fruitful if MUTUAL FUND Distributor becomes idle.
    Rajasekaran Thiagarajan · 2 weeks ago
    Your statement is true. Whether AMFI/SEBI will consider this request?
    Reply
    SHANKAR CHARAN Lenka · 2 weeks ago `
    It is not at all acceptable. It is my request to SEBI to implement B30 special Brokerage as soon as possible.
    PRAVEEN PANDEY · 2 weeks ago `
    How new mfd is survive, plz provide B30 INSENTIVE AS SOON as possible
    gopichand basniwal · 2 weeks ago `
    SEBI shall have to give special incentive to MFD's who bring the investment from rural areas specially village
    Finance Service · 2 weeks ago `
    The most costly customer acquisition is NRI business. Secondly rural area business. Thirdly bringing women customers. So please provide a fixed fees at least @ ₹ 1000 from one AMC as special incentive for bringing NRIs, women and rural area customers. Industry wise per PAN incentive is not practical. Whoever get benefits must give at least ₹ 1000. Why you make compulsory for 24 installments. Once a customer onboarded then that customer is with that AMC
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