Sebi Unveils Incentives to Boost First-Time Women MF Investors

By: WE staff | Friday, 28 November 2025

• Sebi announced a new incentive structure for mutual fund distributors
• The initiative aims to attract more first-time investors to mutual funds
• The details were announced in a circular dated November 27, 2025

According to a circular issued on November 27, 2025, the Securities and Exchange Board of India (Sebi) has unveiled a revised incentive structure for mutual fund distributors in order to attract more first-time investors into the market. The move aims at enhancing outreach, especially in smaller cities and among women investors.

Sebi said the earlier incentive regulation for investment from beyond the top 30 cities was no longer in operation following concerns regarding misuse. The changes have been made taking into consideration suggestions from the industry.

In the revised mechanism, distributors will get an extra commission for bringing in new individual investors with fresh PANs from B-30 cities, apart from getting incentives for onboarding new women investors from both top 30 and B-30 cities. The revised structure will be effective from February 1, 2026.

The circular said distributors would get 1 percent of a single lump-sum investment made for the first time subject to a maximum of ₹2,000, on the condition that the investor remains invested for at least one year.

In case of SIPs, they would get 1 percent of the total amount invested in the first year, again subject to a maximum of ₹2,000. These would be paid out of the 2 bps that AMC already set aside every year for investor education and awareness.

Sebi explained that this extra commission would be provided in addition to the existing trail commission, but distributors cannot claim two incentives on the same investment. For instance, the B-30 incentive and the women investor incentive cannot be applied together.

Certain scheme categories would be exempt from the additional commission: ETFs, domestic fund-of-funds investing over 80 percent in local funds, and schemes with duration of less than one year, like overnight, liquid, ultra-short duration, and low-duration funds.

The circular also said that the Association of Mutual Funds in India would work with Sebi to issue detailed guidelines on the implementation of the circular within 30 days.

It also clarified that any revision in the offer documents made on account of this revised incentive structure shall not be considered as a change to fundamental attributes.