Sebi Proposes Low-Cost SIPs to Boost Mutual Funds Accessibility
In a move aimed at increasing financial inclusion, the Securities and Exchange Board of India (Sebi) unveiled a groundbreaking plan on Wednesday to introduce monthly systematic investment plans (SIPs) with a minimum ticket size of just Rs 250. This initiative, known as sachetisation of mutual funds, seeks to encourage more individuals, particularly those new to the mutual fund space, to start saving systematically and investing even small amounts.
Sebi’s Initiative for Financial Inclusion
The proposal includes partially subsidizing the costs incurred by various intermediaries involved in offering these small-ticket SIPs. By limiting the number of SIPs per PAN card to three, Sebi aims to manage the subsidy amount effectively. This strategic move is designed to promote financial inclusion, cultivate the habit of systematic saving, and facilitate the investment of small savings by a broader range of investors.
Expanding Mutual Fund Accessibility
Under the plan, small-ticket SIPs can be offered in any scheme except for certain categories like debt schemes, sectoral and thematic schemes, and small-cap and mid-cap funds under equity schemes. Sebi envisions that this initiative will enable individuals to make small, periodic investments in mutual funds, empowering the underserved segments of the economy and encouraging fund houses to extend their reach to remote areas across the country.
Incentives for Distributors and Platforms
To drive adoption of these low-cost SIPs, Sebi will provide an incentive of Rs 500 to distributors and execution only platforms (EOPs) for attracting investors to subscribe to these schemes. This additional incentive is meant to supplement the distribution commission paid by fund houses to distributors. Sebi anticipates that the financial inclusion facilitated through this program will enable asset management companies (AMCs) to break even within two years.
Public Feedback and Future Steps
Sebi has invited public comments on these proposals until February 6, after which it will make a final decision on launching small-ticket SIPs. The regulator’s efforts to expand the accessibility of mutual funds through low-cost SIPs reflect a broader commitment to democratizing investment opportunities and fostering a culture of regular savings and wealth creation.
As a journalist, I can’t help but wonder how this groundbreaking initiative will impact the financial landscape for everyday investors. The prospect of being able to invest as little as Rs 250 in mutual funds on a regular basis is not only empowering but also a game-changer for those looking to kickstart their investment journey. With Sebi’s push for wider financial inclusion, the doors to wealth creation are opening up for a whole new segment of the population. It’s exciting to see how this move will shape the future of investing in India and beyond.
