The Securities and Exchange Board of India (SEBI) is planning a major change that could make mutual fund investing easier for salaried people.
Until now, investors could only invest in mutual funds using their own bank accounts. But SEBI is now considering a new system that would allow third-party payments for mutual fund investments.
This means your employer or company may soon be able to deduct money directly from your salary and invest it into your mutual fund account.
Big Relief for Salaried Employees
According to a consultation paper released by SEBI, this move could greatly benefit salaried individuals who want to save and invest regularly without extra effort.
Under the proposed system, companies would be allowed to deduct a fixed amount from employees’ salaries and transfer it directly to Asset Management Companies (AMCs).
At present, this facility is proposed for:
Employees of listed companies
Organizations registered under EPFO
Mutual fund companies and their employees
If approved, this could make SIP-style investing much simpler and more automatic for millions of workers.
Mutual Fund Distributors May Get Units Instead of Cash
SEBI’s proposal also includes new rules for mutual fund distributors.
Currently, distributors receive commissions in cash. Under the new proposal, AMCs may be allowed to pay commissions in the form of mutual fund units instead.
To improve security and transparency:
The mutual fund units will be issued only in the distributor’s own name
Distributors must register with Association of Mutual Funds in India (AMFI)
Companies and RTAs will have to follow strict KYC and anti-money laundering rules
This is aimed at ensuring that benefits reach the correct person and reducing misuse.
Donations Through Mutual Funds Also Proposed
SEBI has also suggested a new way for investors to support social causes through mutual funds.
Under the proposal, investors may be able to donate:
A part of their investment amount
Dividend income
Redemption proceeds
The money can be directly sent to non-profit organizations (NPOs) listed on the Social Stock Exchange through Zero Coupon Zero Principal (ZCZP) instruments.
SEBI believes this system will improve transparency and reduce fraud involving fake NGOs. It will also help ensure that donated money reaches genuine social organizations.
