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Informist, Friday, Sept. 12, 2025

 

--SEBI reduces maximum permissible exit load for MFs to 3% from 5%

--SEBI: REITs classified as equity invest for MFs, Specialised invest funds 

--SEBI: InvITs retained as hybrid invest for MFs, Specialised invest funds 

 

MUMBAI – The board of the Securities and Exchange Board of India has cut the maximum permissible exit load for mutual funds to 3% from 5%, the regulator said in a release on Friday. "Setting the maximum cap at 3% was found appropriate so as to strike a better balance between investor protection and flexibility for schemes having exposure to less liquid securities," the SEBI said. 

 

The present regulatory framework for mutual funds permits mutual fund schemes to charge a maximum exit load of 5%, which gets credited back to the scheme. However, mutual funds generally charge exit loads in the range of 1% to 2%, the SEBI said.

 

The SEBI board also decided to incentivise distributors to create awareness and promote financial inclusion among women investors by asking the industry to pay additional commission to distributors for investments from new women individual investors, the release said. The regulator has also revised the incentive structure for distributors for new inflows from beyond the top 30 cities.

 

The incentive provided to the distributor for new investors will be capped at 1% of the first application amount in case of lumpsum investment, or total investment during the first year in case of systematic investment plan, subject to a maximum of INR 2,000, SEBI said. 

 

The regulator has also classified Real Estate Investment Trusts as equity investments for mutual funds and specialised investment funds to boost participation. The re-classification was proposed, considering the characteristics of REITs being more inclined towards equity, relatively more liquid, and to ensure alignment with global practices, SEBI said. 

 

However, for Infrastructure Investment Trusts, being products primarily privately placed with more stable cash flows and having lesser liquidity, the hybrid classification has been retained.

 

The SEBI board also approved expanding the scope of strategic investors to include all qualified institutional buyers, provident funds and pension funds registered with the Pension Fund Regulatory and Development Authority with minimum corpus of INR 250 million, alternative investment fund, state industrial development corporation, family trust and intermediaries registered with SEBI, and middle layer, upper layer and top layer non-banking finance companies registered with the Reserve Bank of India.

 

"This will promote ease of doing business by enabling InvITs/REITs to attract capital from more investors under the strategic investor category," the SEBI said.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Kabir Sharma

Edited by Saji George Titus

 

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