With an aim to boost mutual fund penetration among first-time and women investors, particularly in smaller cities, SEBI allowed mutual fund houses to offer an additional incentive of 1 per cent (capped at ₹2,000) to first-time investors who stay invested for at least one year
Capital markets regulator SEBI has postponed the implementation of special incentives for mutual fund distributors to March 1 from February 1.
Last November, SEBI had prescribed a framework for incentivising distributors for mobilising investments from new individual investors (based on PAN) from B-30 cities and new women individual investors (PAN-based) from both top-30 cities and smaller cities.
Operational challenges
Based on the feedback received from the industry, citing operational difficulties in implementing the requisite systems and processes for smooth implementation of the additional incentive structure, it has been decided to extend the timeline, said SEBI.
Accordingly, the provisions of the circular will now come into effect from March 1, it added.
MF penetration
With an aim to boost mutual fund penetration among first-time and women investors, particularly in smaller cities, SEBI allowed mutual fund houses to offer an additional incentive of 1 per cent (capped at ₹2,000) to first-time investors who stay invested for at least one year, while distributors will receive a similar incentive for new SIPs started by these investors. The incentives will be funded from the existing 2 bps investor-education allocation and will supplement the standard trail commissions. However, ETFs, FoFs, and very short-duration debt funds are excluded.
Total AUM of B-30 cities stands at 19 per cent of total AUM at industry level and has been broadly outpacing with strong growth especially in equity SIP book.
Considering the scope of gender inclusion in the MF space, SEBI has decided to incentivise distributors to create awareness and promote financial inclusion among women investors.
An additional commission will be paid to distributors for investments by new women individual investors at the industry level. The computation and payment of such commission will be on the same lines as for B-30 incentive, it said.
The move is expected to help MFs expand into under-penetrated markets, attract new investor categories, and accelerate SIP-led growth, while distributors benefit through higher earnings tied to incremental mobilisation.
Published on January 7, 2026
