SEBI Plans Incentives for Women and Tier-2, Tier-3 City Investors in Mutual Funds

To promote greater participation of women in mutual funds, market regulator SEBI will soon launch extra incentives for first-time women investors. Tuhin Kant Pandey, the chairman of the stock market regulator SEBI, announced this on Friday.

Pandey said at an event organized by the Association of Mutual Funds in India (Amfi), "Financial inclusion will remain incomplete until women are given equal representation." He said, "...we are also considering introducing additional distribution incentives for first-time female investors."

He said that SEBI is taking several measures to facilitate and encourage the industry. A recent proposal is also to incentivise distributors to solicit investments from first-time individual investors in B30 cities (tier 2 and tier 3 cities).

According to the regulator, the move will not only add new participants but will also expand the reach of mutual funds to underrepresented segments, thereby contributing to deeper financial inclusion. Further, the Sebi chief said that Sebi is reviewing the classification of mutual fund schemes to provide greater flexibility for product innovation, improve clarity and address the problem of overlap in schemes' portfolios.

He said further steps will be taken based on the feedback received from the consultation process. "These measures will help the industry become more transparent and investor-friendly," the Sebi chairman said. Recently, SEBI has reviewed the reports and filings submitted by mutual funds under ease of doing business and compliance simplification measures."

According to the review, the regulator has made a decision to do away with the filing requirement of more than 52 reports, notices, and addenda by asset management companies (AMCs). The regulator will also try to thoroughly simplify mutual fund rules in the next several months. Pandey stated that the intention is to make compliance more convenient for the industry and safeguard investors' interests.

In addition to this, SEBI also warned investors of fraud being promoted through social media messages or mobile apps. These falsely claim to provide access to the stock market through foreign portfolio investors (FPIs). SEBI warned that such schemes are illegal and are not supported by the regulator.