The Securities and Exchange Board of India (SEBI) has proposed SIPs as small as Rs 250 to increase the penetration of mutual funds among the underserved section of the country. However, many asset management companies (AMCs) are already offering smaller sized SIPs. But the market regulator believes the introduction of smaller SIP sizes will help the entire industry participate in financial inclusion. The market regulator, in a consultation paper released on Wednesday, suggested clarifying the cost aspect of small SIPs.
Under the proposal, Sebi said AMCs will be able to utilize the investor education and awareness fund to reach the compensation level in case of small SIPs. Intermediaries will charge lower rates for such SIPs. The regulator has sought suggestions on these proposals till 6 February.