Mutual funds are not just the right choice, they should be the default choice: Sebi Chief 

Sebi Chairperson Tuhin Kanta Pandey highlighted how mutual funds are a bridge for Indian households to access the markets that seem to be a “distant fortress,” at the Association of Mutual Funds in India’s (AMFI) 30th Foundation Day event. “An investor in a small town with a modest SIP can cross that bridge and participate in India’s growth story. This is financial democracy in action,” he said in the address. 

Pandey noted how mutual funds have transformed India’s financial landscape by converting savings into investments. Speaking of numbers, the assets under management (AUMs) have grown fivefold in a decade—from ₹14 lakh crore to ₹75 lakh crore today. The number of unique investors has expanded from one crore to 5.6 crore, and this sharp uptick is due to SIPs creating a sense of disciplined habit. 

Elaborating on Sebi’s role in deepening participation and strengthening governance, Pandey used multiple illustrations like Choti SIPs, MF Lite framework, and specialised investment funds (SIFs), which are targeted to satisfy all demographics. The Sebi chief also mentioned the Mitra platform, which helps investors trace inactive and unclaimed portfolios, and MF Central, which was launched for consolidated holdings and simplified compliance. “These steps reinforce trust, widen access, and encourage responsible innovation,” Pandey said.

While endorsing innovation, Pandey cautioned against excesses that could damage investor confidence. “For if growth is the body of this industry, trust is its soul, and trust must be protected every single day,” he said. 

Pandey stressed the need to avoid preferential treatment in redemptions and subscriptions and also exercise caution in micro-cap and debt investments. Pandey reminded of the importance of vigilance against fraud and impersonation risks. Cyber resilience data privacy should be the top priority, as “protecting that data is as important as protecting their money.”

For the forward outlook, the Sebi chief stressed enhancing the capacity of individual investors to help them deal with the growing complexity of financial markets. “Today, less than 5% of India’s population invests in mutual funds, which highlights the immense potential that lies ahead,” he said. 

Therefore, increasing penetration and involving women in financial inclusion is a key priority. Pandey cited a different proposal for the same, which included incentivising distributors for investments from first-time investors in B30 cities and an additional distribution incentive for investments from first-time women investors.

“To provide greater flexibility for product innovation, improve clarity and address the overlap in the portfolio of schemes, we are reviewing the categorisation of mutual fund schemes,” the regulator said, to facilitate the industry to become more transparent and investor-friendly.

To simplify measures, Sebi has decided to discontinue the requirement of filing of over 52 reports, notices and addenda with the regulator by the AMCs. 

“Amidst this exciting future, let us remember our true benchmark is not just AUM, it is trust under management,” said Pandey in his address. 

AMFI hosted its 30th Foundation Day event in Mumbai, which was marked by multiple announcements, such as MoUs signed with educational institutions including IIM Bodh Gaya (Bihar), IIM Shillong (Meghalaya), IIM Visakhapatnam (Andhra Pradesh), and XIM University Bhubaneswar (Odisha), to leverage academic expertise and institutional networks to spread financial literacy. 

The celebrations also featured the signing of an MoU with the Department of Posts to train one lakh postmen across India, enabling them to distribute mutual funds across the country. 

AMFI also unveiled a series of new investor education initiatives, including ‘Nivesh Ka Sahi Kadam’ and ‘Bharat Nivesh Rail Yatra’.