In a bid to strengthen investor protection and improve transparency while deepening financial inclusion, market regulator Securities and Exchange Board of India (Sebi) has slashed maximum permissible exit load from 5% to 3%.
Sebi noted that most schemes currently charge between 1% and 2% as exit load, and lowering the cap will align regulation with industry practice while balancing investor protection and flexibility for schemes invested in less liquid assets.
The decision was taken in a Sebi board meeting held today. The meeting was chaired by Chairman Tuhin Kanta Pandey, his third since taking over as the chief in March.
In a series of reforms in the mutual fund (MF) sector, the regulator also revised the incentive structure for distributors to encourage broader participation in MFs.
Also Read: Sebi widens IPO anchor book to include insurers and pension funds, raises reservation to 40%
Going forward, distributors will earn incentives only on inflows from new individual investors (new PAN) in B-30 cities. The incentive will be capped at 1% of the first application amount or first-year SIP contributions, subject to a maximum of Rs 2,000.
In a bid to promote gender inclusion, Sebi has introduced a separate incentive for onboarding new women investors. Distributors will receive additional commission for inflows from women with new PANs, calculated on the same lines as the B-30 incentive.
These proposals were first discussed by the Mutual Fund Advisory Committee in January 2023, followed by a consultation paper in May 2023 and further industry-level consultations in July 2025. Based on stakeholder feedback, the finalized framework was approved by the Sebi board this week.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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Sebi noted that most schemes currently charge between 1% and 2% as exit load, and lowering the cap will align regulation with industry practice while balancing investor protection and flexibility for schemes invested in less liquid assets.
The decision was taken in a Sebi board meeting held today. The meeting was chaired by Chairman Tuhin Kanta Pandey, his third since taking over as the chief in March.
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In a series of reforms in the mutual fund (MF) sector, the regulator also revised the incentive structure for distributors to encourage broader participation in MFs.
Also Read: Sebi widens IPO anchor book to include insurers and pension funds, raises reservation to 40%
Going forward, distributors will earn incentives only on inflows from new individual investors (new PAN) in B-30 cities. The incentive will be capped at 1% of the first application amount or first-year SIP contributions, subject to a maximum of Rs 2,000.
In a bid to promote gender inclusion, Sebi has introduced a separate incentive for onboarding new women investors. Distributors will receive additional commission for inflows from women with new PANs, calculated on the same lines as the B-30 incentive.
These proposals were first discussed by the Mutual Fund Advisory Committee in January 2023, followed by a consultation paper in May 2023 and further industry-level consultations in July 2025. Based on stakeholder feedback, the finalized framework was approved by the Sebi board this week.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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