SEBI Extends MF Distributor Incentive: The Securities and Exchange Board of India (SEBI) on Wednesday extended the deadline for implementing a new incentive plan for mutual fund distributors. The move is aimed at encouraging distributors to bring more investors from smaller cities and increase women’s participation in mutual funds.
Earlier, the incentive structure was set to take effect from February 1, 2026. It will now be implemented starting March 1, 2026. SEBI said the decision was made after receiving feedback from the mutual fund industry, which highlighted operational challenges in putting the required systems and processes in place 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 meant to encourage distributors to bring new individual investors from B-30 cities, which are areas outside the top 30 cities, and attract more women investors across India. This is part of SEBI’s broader effort to increase mutual fund participation and improve financial inclusion.
Under the updated framework, asset management companies will pay distributors an extra commission of 1 per cent on the first lump-sum investment or the first year’s SIP amount, capped at Rs 2,000. The incentive will be paid only if the investor stays 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. (With IANS Inputs)
