SEBI’s Reforms Powering Mutual Fund Growth

India’s mutual fund industry has scaled a fresh milestone, with assets under management (AUM) crossing ₹75 lakh crore in August—an impressive 15 per cent rise over last year’s ₹65 lakh crore. What makes this growth striking is that it has unfolded even as equity markets stayed largely flat. At the centre of this expansion is the proactive regulatory stance of the Securities and Exchange Board of India (SEBI), which continues to shape a more transparent and inclusive ecosystem.[EasyDNNnews:PaidContentStart]

A slew of reforms has been ushered in by SEBI recently to boost participation of investors, one of them being reduction in maximum exit load from 5 per cent to 3 per cent. Exit loads in global markets usually hover around 1–2 per cent, and SEBI’s move strikes a balance between curbing excessive fees and protecting investors. For retail investors, especially those with a long-term view, the change instils confidence while still offering flexibility for those who may need liquidity.

Another game-changing step is the restructuring of incentives for mutual fund distributors in B-30 cities—beyond India’s top 30 urban centres. Incentives are now capped at 1 per cent of the first-year investment or ₹2,000 per new PAN. This model directly addresses the urban-rural divide, encouraging distributors to penetrate Tier-2 and Tier-3 cities. The result could be millions of first-time investors gaining access to wealth-creation tools that were once the preserve of metros.

SEBI has also turned the spotlight on gender inclusivity by extending the same B-30 incentives to women investors. Women currently account for only about 25 per cent of mutual fund participants, and this targeted push is expected to empower them financially while strengthening household savings.

With India aiming for 7 per cent GDP growth amid global uncertainties, SEBI’s reforms are timely. By recalibrating costs, incentivising wider participation, and promoting inclusivity, the regulator is not merely enforcing rules but nurturing investor trust. In doing so, SEBI is laying the foundation for sustainable growth in one of the most critical pillars of India’s financial markets.

Shashikant Singh
Executive Editor

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