The Securities and Exchange Board of India (SEBI) has started a discussion on the proposed combination plan to integrate mutual funds (MF) and insurance. The matter will be discussed in the next meeting of the Mutual Fund Committee of the regulator. SEBI president Madhavi Puri Buch said that the Association of Mutual Funds in India (Amphie) has submitted suggestions to the regulator. SEBI’s counseling committee on funds has already reviewed these suggestions.
Buch said, ‘We work through deliberations. Our Mutual Fund Advisory Committee has given feedback and requested additional data. The matter will be considered again in the next meeting.
Industry sources indicated that the next meeting of the committee is to be held next week. After further discussions, SEBI may issue a consultation paper on the proposed scheme. When asked how different the new scheme would be from the insurance industry’s existing unit-linked insurance plan (ULIP), Buch said, ‘You will know it only after offering it.’
Buch said these things while starting the Micro SIP scheme ‘Jana Vanivesh’ of SBI Fund. In the public investment, investors will be able to do SIP with low investment like Rs 250. The scheme, launched to attract new investors, is part of the Balanced Advantage Fund of SBI Mutual Fund.
On this occasion, State Bank of India (SBI) President CS Shetty announced that the bank has waived the transaction fee for the scheme. Shetty said, ‘Everyone would like to ensure that no fee or commission is charged in this scheme as our commitment to financial services. This will be a free service for our customers, which will promote strong financial participation.
In January, SEBI issued a counseling paper. It proposed measures to make small SIPs more economical for mutual funds. These measures also include using investor education and awareness funds so that the asset management companies (AMCs) do not get a loss -like situation from such SIPs and help them to compensate. Also, there were concessional rates from industry companies on mutual fund investment fees. However, these draft standards are still awaiting the approval of the SEBI board.
Buch emphasized that the spending from the Investor Education and Awareness Fund would be a small part of the total fund. He said, ‘The entire mechanism (mutual funds, RTA i.e. Registrar and Transfer Agent, Depository) have come forward with the spirit of partnership to ensure that the new scheme can be ensured that the new scheme can be made from the brake-building within two to three years. Came out With this, mutual funds will be able to see this offer as an opportunity for real growth rather than the cost burden.
Under the proposed structure, SEBI has suggested the limit of three schemes for SIP initiative of Rs 250.
First Published – February 17, 2025 | 10:54 pm IST
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