SEBI member pushes for scaling up framework of small SIPs for more traction
This story was originally published at 13:00 IST on 13 May 2026
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--SEBI member:Fincl distribution much more than last mile reach to investors
--CONTEXT: SEBI Whole Time Member Amarjeet Singh speaking at a FICCI event
--SEBI member: We need to see more traction in small SIPs
--SEBI member: Urge MFs to ensure all communication suitable, transparent
--SEBI member: Pdt complexity without downside risk awareness a problem
--SEBI member: Misselling can happen without us getting investor complaints
--SEBI member: Ethical distribution of MF products is essential
--SEBI member: Conflict of interests must be disclosed by distributors
MUMBAI – The Securities Exchange Board of India's Whole Time Member Amarjeet Singh Wednesday said there was lot of scope to scale up the framework of the "choti SIP", or small systematic investment plan. "There is a lot of scope for scaling it up. We need to see more traction there. Similar to the successful model of mutual fund distribution, now we are looking at this model, how we can indicate this in other parts of the financial system," Singh said at the Federation of Indian Chambers of Commerce and Industry's financial products distribution summit.
The whole time member said market participation should be based on informed decision-making and long-term planning and should not be driven by social media trends. He urged the mutual funds to ensure all communication to be suitable and transparent.
"You should actually build a relationship with the customer over time, and the interest of the distributor should be aligned with the interest of the investor," Singh said. "That is how trail-based commissions become more important than the entry level incentives."
The whole time member said offering investors regulated products with greater flexibility and complexity is not a problem, but complexity without adequate understanding products can be problematic. "And that's where distributors come in. Investors often grasp the upside narrative far better than the downside," he said.
Talking about financial distribution, he said it was much more central than last mile. "Distribution determines whether finance remains concentrated in a few hands, or whether it truly becomes a vehicle for broad-based economic participation," Singh said.
He said misselling can happen without receiving any complaint from customer. "The customer may discover that some products were mis-sold to him maybe one or two years after the product was sold, and he may be too lazy to really complain. That's a little finer nuanced point about it," Singh said.
Singh urged ethical distribution of mutual fund products is essential and distributors' conflict of interests must be disclosed to distributors. The regulator is working on a trail-based commission framework in the nuclear industry which seeks to better align distributors' distribution incentives with long-term investor outcomes, he said. End
Reported by J. Navya Sruthi and Kabir Sharma
Edited by Akul Nishant Akhoury
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