Market regulator Sebi panel to discuss MF-insurance combo product

JanNivesh launch: Buch signals Sebi review, SBI MF scraps fees to push micro SIPs

The Securities and Exchange Board of India (Sebi) has initiated discussions on a proposed combination product integrating mutual funds (MFs) and insurance. The regulator’s MF committee will discuss the matter at its next meeting.

 

Sebi Chairperson Madhabi Puri Buch revealed that the Association of Mutual Funds in India has submitted recommendations to the market regulator. Sebi’s advisory committee on MFs has already reviewed these suggestions once.

 

“We operate through consultations. Our MF advisory committee has provided feedback and requested additional data. The matter will be revisited in the next meeting, so it remains a work in progress,” Buch said.

 

Industry sources indicate that the committee’s next meeting is scheduled for the coming week.

 

Following further discussions, Sebi may release a consultation paper on the proposed product.

When asked how the new product would differ from the insurance industry’s existing unit-linked insurance plans, Buch responded, “You will see when the product is launched.”

 

Buch made these remarks during the launch of SBI MF’s micro systematic investment plan (SIP) scheme, JanNivesh. The scheme, which allows investments as low as ₹250, is part of SBI MF’s balanced advantage fund and aims to attract new investors.

 

At the event, State Bank of India (SBI) Chairperson C S Setty announced that the bank has waived transaction fees for the scheme.

 

“As part of our commitment to financial inclusion, we aim to ensure there are no charges or commissions on this scheme. It will be a free service for our customers, promoting greater financial participation,” Setty said.

 

In January, Sebi released a consultation paper proposing measures to make smaller SIPs more cost-effective for MFs. These measures included utilising the investor education and awareness fund to help asset management companies achieve break-even on such SIPs, as well as discounted rates from industry players on MF investment charges. However, the draft norms are still awaiting approval from the Sebi board.

 

Buch emphasised that the expenditure from the investor education and awareness fund would constitute a relatively small portion of the total fund.

 

“The entire ecosystem — MFs, registrar and transfer agents, depositories — has come together in a spirit of partnership to ensure the product reaches break-even within two to three years. This will enable MFs to view it as a genuine growth opportunity rather than a cost burden,” she explained.

 

Under the proposed framework, Sebi has suggested capping the ₹250 SIP initiative at three schemes.