SEBI unveils new incentive model to boost mutual fund penetration among women, B-30 investors

SEBI has introduced a new incentive framework to deepen mutual fund penetration among untapped investor segments, with a sharp focus on women and individuals from beyond the top 30 cities (B-30). 

The regulator will now reward distributors for onboarding first-time investors with new Permanent Account Numbers (PANs), rather than just bringing in incremental flows from B-30 regions. Two specific categories will attract these incentives: new individual investors from B-30 cities and new women investors from both top-30 and B-30 cities. 

To prevent misuse, SEBI has barred dual claims — distributors can’t claim both incentives for the same investor. 

The revised framework, effective February 1, 2026, replaces the decade-old model, which had drawn criticism over inconsistent implementation and alleged loopholes. SEBI formally scrapped Regulation 52(6A)(b) via a gazette notification on October 31, 2025. 

A uniform commission structure will now apply across all Asset Management Companies (AMCs). Distributors will earn 1% of the investor’s first lump-sum investment — capped at ₹2,000 — if held for at least a year. For SIPs, the same 1% applies on total contributions in the first year, again capped at ₹2,000. 

These commissions will no longer be drawn from scheme expenses. Instead, AMCs will fund them using the 0.02% corpus earmarked for investor education and inclusion. Claw-back provisions will apply if investments don’t meet the minimum one-year holding period. 

To align with long-term participation goals, SEBI has excluded certain products from the incentive scheme — ETFs, domestic Fund of Funds with over 80% exposure to Indian funds, and short-duration schemes like Overnight, Liquid, and Ultra Short Duration Funds. 

The Association of Mutual Funds in India (AMFI) has been asked to issue implementation guidelines within 30 days, covering aspects like PAN checks, city classifications, and distributor eligibility. Updating scheme documents to reflect the changes will not require investor consent, as SEBI has clarified it will not constitute a Fundamental Attribute Change.