Industry Odisha Bureau, May 24: With an aim to make mutual fund investments more convenient as well as boost up financial inclusion, the Securities and Exchange Board of India (SEBI) has reportedly put forth a proposal through a consultation paper on Wednesday.
As reported, the proposal would allow:
a) “Employers to facilitate mutual fund investments for employees through payroll deductions.”
b) “Mutual fund distributors (MFDs) to receive trail commissions in mutual fund units instead of cash.” [Only MFDs registered with the Association of Mutual Funds in India (AMFI)]
c) “Investors to donate portions of their mutual fund investments or returns to social causes through regulated structures with safeguards.”
The proposal also reportedly specifies the eligible employers who could offer this facility.
Accordingly, the eligible employers are:
a) “Employees’ Provident Fund Organisation (EPFO)-registered employers”
b) “Listed companies”
c) “Asset Management Companies (AMCs)”
Reports added that the SEBI’s such a proposal seeks to introduce the new payment mechanisms keeping the investor’s protection intact and safeguarded.
SEBI’s retrictions on the third-party payments were reportedly imposed to avert “money laundering”, “fraud risks”, and “unauthorized transactions”.
However, SEBI’s new proposal reportedly states that:
a) “The investments would now be made directly from the eligible investor’s verified bank account.”
b) “The redemption proceeds would now be credited into the same verified bank account.”
