The Securities and Exchange Board of India (SEBI) has announced a delay in the rollout of a new incentive plan for mutual fund distributors.
Originally scheduled to start on February 1, 2026, the plan will now come into effect from March 1, 2026.
The extension comes after mutual fund companies highlighted operational challenges in setting up the necessary systems for smooth implementation.
SEBI said the decision ensures distributors and companies are fully prepared before the new incentive framework begins.
What’s the Incentive About?
The incentive plan is designed to encourage distributors to attract new investors from smaller towns (B-30 cities) and increase women’s participation in mutual funds.
Under the revised structure:
Distributors will earn an extra 1% commission on a new investor’s first lump-sum investment or first year of SIP, up to a maximum of ₹2,000.
The incentive is paid only if the investor remains invested for at least one year.
The additional commission will come from the 2 basis points already set aside by asset management companies (AMCs) for investor education.
SEBI clarified that dual incentives will not be allowed for the same woman investor from B-30 cities.
Why This Matters
This move is part of SEBI’s larger push to increase mutual fund participation across India and promote financial inclusion, especially in smaller towns and among women investors.
By offering extra incentives, SEBI hopes distributors will focus on bringing in new investors, helping expand the reach of mutual funds beyond major cities.
