The Securities and Exchange Board of India (SEBI) has decided to push back the implementation of a new incentive plan for mutual fund distributors.
The new deadline is March 1, 2026, instead of the earlier February 1, 2026 start date.
The move comes after feedback from the mutual fund industry, which highlighted operational challenges in setting up systems and processes needed to implement the plan smoothly.
SEBI said the extension will give distributors more time to prepare and ensure a smooth rollout.
What the Incentive Plan Means
The incentive plan is designed to encourage distributors to attract investors from smaller towns (B-30 cities, which are outside India’s top 30 cities) and increase women’s participation in mutual funds.
Under the plan, asset management companies (AMCs) will pay distributors an extra 1% commission on the first lump-sum investment or the first year of SIPs, capped at ₹2,000.
This incentive is only paid if the investor remains invested for at least one year.
The additional commission will come from the 2 basis points already allocated by AMCs for investor education and will be over and above existing trail commissions.
However, SEBI has clarified that dual incentives will not be allowed for the same woman investor from a B-30 city.
Why This Matters
This plan is part of SEBI’s broader effort to boost financial inclusion in India.
By encouraging distributors to focus on smaller towns and women investors, the regulator hopes to increase mutual fund participation and bring more people into the formal financial system.