Last Updated:
Sachetisation of common funds will certainly allow tiny ticket financial investment in common funds slowly on a regular basis, and it can aid in economic empowerment of the under-served area of the economic climate, claims Sebi.
Sebi stated the tiny ticket SIP that a financier can begin might be limited to 3 SIPs (one each in as much as 3 AMCs).
To raise the reach and promote engagement from low-income teams in common funds, regulatory authority Sebi on Wednesday drifted an appointment paper on âsachetisationâ of common funds.
In its examination paper, Sebi has actually suggested a sachetized common fund item– tiny ticket organized financial investment strategy (SIP) of Rs 250. Further, tiny ticket SIPs can be used in any kind of plan besides financial debt systems, sectoral and thematic systems, small-cap and mid-cap systems under equity systems classification.
Presently, while some Asset Management Companies (AMC) do provide SIP with tiny ticket dimension under several of their systems.
“Sachetisation of common funds will certainly allow tiny ticket financial investment in common funds slowly on a regular basis. This can aid in economic empowerment of the under-served area of the economic climate and push fund homes to broaden their impacts to also remote places in the nation,” Sebi said.
Elaborating on the proposal, Sebi said that the small ticket SIP â Rs 250 SIPâ that an investor can start may be restricted to three SIPs (one each in upto 3 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 the first three Rs 250 SIP.
Sebi has suggested that the mode of payment/investment for small ticket SIP should be restricted to National Automated Clearing House (NACH) and Unified Payment Interface (UPI) autopay mode only.
The Know Your Customer (KYC) cost incurred by the scheme for small ticket SIP may be compensated from the fund collected by AMCs by charging 1 bps to mutual fund schemes for investor education and awareness.
The regulator Sebi said that an incentive of Rs. 500 should be provided to distributor/Execution OnlyPlatforms (EOPs) for small ticket SIP. The incentive should be over and abovethe distribution commission payable by AMC to the distributor.
The regulator expected that the financial inclusion facilitated under this scheme would break-even for the AMCs within 2 years.
Since 2014, the Asset under Management (AUM) of the industry has grown from Rs 10 lakh crore to over Rs 68 lakh crore as on November 2024 and the total number of unique investors of mutual funds has grown from 1.7 crores to 5.18 crore during the period.
While the number of investors participating in mutual funds has grown steadily over the years, Sebi felt a considerable opportunity for increasing the reach of the product to all sections of the society, to enable every individual to have access to this financial product and accordingly came out with the proposal.
The Securities and Exchange Board of India (Sebi) has sought public comments on the proposals till February 6.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)
