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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.