New Delhi, Jan 7 (IANS) Markets regulator Securities and Exchange Board of India (SEBI) on Wednesday extended the timeline for implementing an additional incentive structure for mutual fund distributors aimed at bringing in new investors from smaller cities and more women investors into the mutual fund ecosystem.
The new incentive framework, which was earlier scheduled to come into effect from February 1, 2026, will now be implemented from March 1, 2026.
SEBI said the decision was taken after receiving feedback from the mutual fund industry, which flagged operational challenges in setting up the required systems and processes for smooth implementation.
“Based on the feedback received from the industry, citing operational difficulties in putting place the requisite systems and processes for smooth implementation of the additional incentive structure, it has been decided to extend the implementation timeline,” the market regulator said.
“Accordingly, the provisions of the aforesaid circular shall now come into effect from March 01, 2026,” it added.
The incentive structure is designed to encourage distributors to onboard new individual investors from B-30 cities, which refer to locations beyond the top 30 cities, as well as new women investors from any part of the country.
The move is part of SEBI’s broader effort to deepen mutual fund penetration and improve financial inclusion.
Under the revised framework, asset management companies will pay distributors an additional commission equal to 1 per cent of the first lump-sum investment or the first-year SIP amount, subject to a maximum of Rs 2,000.
This incentive will be paid only if the investor remains invested for at least one year.
SEBI clarified that the additional commission will be paid from the 2 basis points already earmarked by AMCs for investor education and will be over and above the existing trail commissions.
However, the regulator has made it clear that dual incentives will not be allowed for the same woman investor from B-30 cities.
–IANS
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