There is going to be a big change for those investing in mutual funds from November 1. Direct mutual fund plans will now be the default option on the digital platforms of Asset Management Companies (AMCs). That is, while investing, investors will first see the option of direct plan. At the same time, those choosing regular plan will also have to provide information about its higher expense ratio. SEBI Chairman Tuhin Kant Pandey gave this information in NDTV Profit Ignite 2026.
Direct mutual fund plan will be default from November 1
The purpose of this step of SEBI is to help investors understand the cost of investment and take better decisions. In direct plan, investors buy mutual funds without any distributor. At the same time, the expenses related to the distributor are also included in the regular plan.
Both the plans invest in the same mutual fund scheme and have the same portfolio. But the expense ratio of direct plans is usually low. This may affect investors’ returns in the long run. If investors wish, they will also be able to choose regular plans. However, on doing so they will be informed about the higher expense ratio.
It is important to understand the cost and risk before investing.
Tuhin Kant Pandey said that it is not enough to make investing easy, but investors should also understand what they are investing in, what is its expense and how much risk is there in it.
Citing SEBI’s investor survey, he said that 63% of the families are aware of at least one product of the securities market. However, only about 9.5% of these families invest in the market. The purpose of making direct mutual fund plans the default option is to make investors easily accessible to low-cost options and to make them aware of the expenses related to investment.
The process will also be easy for foreign investors
SEBI Chief also raised the issue of participation of foreign investors in the Indian market. He said that the Indian markets are largely at par with the major markets of the world, but there is a need to reduce the burden related to compliance with the rules. SEBI will see whether the people and companies working in the Indian market are not burdened with more regulations as compared to other developed and emerging markets. For this, the regulator will also soon issue a consultation paper regarding changes in some existing rules.
Apart from this, Tuhin Kant Pandey said that SEBI is working together with the Reserve Bank of India (RBI) to make the process of investing in the Indian market faster and easier for foreign investors.
Source: ndtv.in
