In a consultation paper, SEBI said the proposals aim to improve ease of investing while maintaining safeguards under the Prevention of Money Laundering Act (PMLA).
Also Read: SEBI proposes revamp of STP framework to cut costs, reduce concentration riskOne proposal would allow listed companies, EPFO-registered firms and AMCs to facilitate employee investments in mutual fund schemes through salary deductions, with employees required to opt in and investments credited in their own names.
SEBI has also proposed allowing AMCs to compensate empanelled mutual fund distributors (MFDs) through mutual fund units instead of trail commissions in cash. The regulator said the mechanism could encourage disciplined long-term investing by distributors, while also seeking feedback on safeguards against possible mis-selling or conflicts of interest.Separately, the regulator proposed allowing investors to contribute part of their subscription amount or scheme returns toward social causes, including through Social Stock Exchange-listed non-profits or specified NGOs.
Also Read: India to launch first weather trading contract to help businesses hedge monsoon shocks
To address PMLA risks, SEBI proposed safeguards such as robust KYC checks for payer and beneficiary, mandatory electronic fund trails and routing redemption or dividend proceeds only to verified beneficiary accounts.
SEBI also proposed that detailed operational guidelines be framed by the Association of Mutual Funds in India in consultation with the regulator.
Public comments on the proposals have been invited till June 10, 2026.
Also Read: Sebi mulls easing compliance rules for research analysts on call records
(Edited by : Asmita Pant)
