India regulator planning incentives for funds houses to attract first-time women investors, chair says

MUMBAI: India’s markets regulator plans to propose additional financial incentives for distributors and fund houses to enroll first-time women investors, its chairperson said on Friday, in its latest bid to increase penetration of mutual fund products.

Women investors’ assets under management (AUM) accounts for about 33% of individual investors’ AUM as of March 2024, according to data from Association of Mutual Funds in India (AMFI).

“We are proposing to give additional incentives to distributors of mutual funds for first-time women investors,” Securities and Exchange Board of India chairperson Tuhin Kanta Pandey said at an AMFI event, without providing further details.

SEBI has been trying to boost mutual fund penetration in the country by promoting financial awareness and improving financial inclusion.

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In a consultation paper published in January, the regulator asked fund houses to launch systematic investment plans (SIPs) starting at 250 rupees or around $3 with lower costs and easier customer identification processes.

Fund houses such as Kotak Mutual Fund and SBI Mutual Fund followed up by introducing small-sized investment plans earlier this year.

SEBI also plans additional monetary incentives for distributors who enroll first-time investors from beyond India’s top 30 cities, Pandey said, adding that the mutual fund industry should work to promote sachet-sized SIPs, which could offer small investors a way into the financial markets.

The regulator is open to adjusting rules to support the industry in promoting such small-ticket investment products, he said.