Markets regulator SEBI is looking to allow investors to buy mutual funds worth up to Rs 50,000 through digital wallets to make it easier for investors to purchase these instruments, especially by young generation.
The move would help in speedy and easy transactions, while reducing failures due to payment gateway issues.
Besides, the Securities and Exchange Board of India (Sebi) is expected to put in place regulations for instant withdrawal facility in liquid mutual fund. Also, asset management companies (AMCs) can tie-up with payment banks to provide digital transaction to investors.
The board of Sebi will discuss proposals in this regard next week, sources said.
These new facilities will help in increasing the penetration of mutual funds and help in channelising household savings into capital markets. It would also provide convenient option to investors to diversify from traditional saving avenue.
Under the proposal, total subscription through e-wallet for an investor should be restricted up to Rs 50,000 per mutual fund in a financial year.
The regulator may ask AMCs to enter into an agreement with payment pre-paid payment instruments for facilitating payment from e-wallets of the investors to mutual fund schemes.
AMCs will have to ensure that e-wallet issuers must not offer incentive such as cash back directly or indirectly for investing in MFs through them.
Further, e-wallet’s balance loaded through cash, debit card and net banking, can only be used for subscriptions to mutual funds. However, balance loaded with credit card, cash back and promotional scheme should not be allowed for purchase of such products.
Sebi may come out with framework for instant access facility in liquid schemes, wherein investors can withdraw their funds invested in the scheme within a very short time through online mechanism.
For instant access facility, the regulator may set a limit of Rs 50,000 or 90 per cent of investment, whichever is lower, per day per investor per scheme.
The regulator may mandate fund houses to get prior approval from the asset management company board and trustee board before offering this facility to investors and also make appropriate disclosures in offer documents.
Currently, 41 active asset management companies (AMCs) together manage assets worth Rs 18.3 lakh crore and mutual fund investor accounts are over 5 crore.
MFs are investment vehicles made up of a pool of funds collected from a number of investors. The funds are invested in stocks, bonds and money market instruments, among others.