Ministry : Ministry of Finance (SEBI)

Extension of timeline for implementation of additional incentives structure for

Subject : ministry of finance

CIRCULAR HO/(83)2025-IMD-POD-1/I/2027/2026

A SEBI circular extending the implementation timeline for the new distributor incentive framework aimed at onboarding new individual investors from B-30 cities and women investors, reflecting industry feedback on operational readiness.

Key Points

• Background and purpose: SEBI had issued Circular No. HO/(83)2025-IMD-POD-1/I/152/2025 (dated November 27, 2025) “prescribed a framework (to come into effect from February 01, 2026) for incentivizing distributors for mobilizing investment/inflows from the following categories of investors at the mutual fund industry level,” namely “1.1. New individual investors (new PAN) from B-30 cities; 1.2. New women individual investors (new PAN) from both T-30 and B-30 cities.”
• Quote: “SEBI, vide Circular No. HO/(83)2025-IMD-POD-1/I/152/2025 dated November 27, 2025, prescribed a framework (to come into effect from February 01, 2026) for incentivizing distributors for mobilizing investment/inflows from the following categories of investors at the mutual fund industry level.”
• Extended timeline: “Based on the feedback received from the industry, citing operational difficulties in putting place the requisite systems and processes for smooth implementation of the additional incentive structure, it has been decided to extend the implementation timeline. Accordingly, the provisions of the aforesaid circular shall now come into effect from March 01, 2026.”
• Quote: “Based on the feedback received from the industry, citing operational difficulties in putting place the requisite systems and processes for smooth implementation of the additional incentive structure, it has been decided to extend the implementation timeline. Accordingly, the provisions of the aforesaid circular shall now come into effect from March 01, 2026.”
• Scope and compatibility: 3. All other provisions of SEBI Circular dated November 27, 2025 shall remain unchanged.
• Quote: “3. All other provisions of SEBI Circular dated November 27, 2025 shall remain unchanged.”
• Legal basis: 4. This circular is issued in exercise of powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992, and the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, in the interest of investors and to promote the orderly development of the mutual fund industry.
• Quote: “4. This circular is issued in exercise of powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992, and the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, in the interest of investors and to promote the orderly development of the mutual fund industry.”
• Availability and contact: 5. This circular is available at www.sebi.gov.in under the link “Legal-> Circulars.”
• Quote: “5. This circular is available at www.sebi.gov.in under the link ‘Legal-> Circulars’.”

Affected entities include all mutual funds, asset management companies (AMCs), trustee companies of mutual funds, registrar to an issue and share transfer agents (RTAs), and the Association of Mutual Funds in India (AMFI), with the primary impact on onboarding new PAN investors from B-30 cities and new PAN women investors from T-30 and B-30 cities.

Summary: Extension of Distributor Incentives Timeline for Onboarding New Investors

This SEBI circular extends the effective date of the newly proposed distributor incentive framework—designed to reward mobilization of fresh investments from new PAN holders in B-30 cities and from women investors in both T-30 and B-30 cities—from February 1, 2026 to March 1, 2026, citing industry-wide operational challenges. The core policy and eligibility remain intact, with all other provisions staying as previously published in the November 27, 2025 circular. The change signals a cautious, implementation-ready approach by SEBI to broaden investor access while ensuring mutual funds’ ecosystems can support the required systems and processes. It underscores SEBI’s ongoing effort to incentivize distributor-led inclusion of underpenetrated investor segments, and reiterates the regulatory framework governing such incentives under the SEBI Act and Mutual Funds Regulations.