SEBI Seeks Comments on Proposed ₹250 Small Ticket SIP

The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing a ₹250 Small Ticket Systematic Investment Plan (SIP). Public feedback on the proposal is invited until February 6, 2025. The initiative is intended to promote financial inclusion and simplify mutual fund access for small investors.

Proposal Details

SEBI has proposed that investors can initiate up to three small ticket SIPs of ₹250, limited to one per Asset Management Company (AMC). While AMCs can offer more such SIPs, discounted rates from intermediaries will apply only to the first three. Payments can be made through National Automated Clearing House (NACH) mandates or UPI auto pay.

The proposed scheme allows an investment limit of ₹50,000 per investor, per mutual fund, annually. Aadhaar verification will be mandatory, while PAN details are not required. The SIP will be available only under the ‘Growth’ option, with investors expected to commit to five years (60 installments). Premature withdrawals will remain unrestricted.

Cost Management and Incentives

To reduce the financial burden on AMCs, SEBI has suggested using funds from the Investor Education and Awareness Fund to cover a part of the costs. The regulator expects AMCs to break even on these small-ticket SIPs within two years. Distributors and execution-only platforms promoting these SIPs will receive a ₹500 incentive per SIP, along with their regular commission.

Exclusions and Eligibility

Debt schemes, sectoral and thematic funds, small-cap, and mid-cap schemes are excluded from this proposal. Existing investors with active SIPs or lumpsum investments will also not be eligible. This will help make sure that the initiative targets new and small investors who may not currently participate in mutual funds.

Industry Context

The mutual fund industry has grown majorly, with assets under management increasing from ₹10 lakh crore in 2014 to over ₹68 lakh crore in November 2024. However, SEBI sees an opportunity to widen access further, particularly among low-income groups. This consultation seeks to address these gaps and make mutual funds more accessible to underserved sections of the population.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.