SEBI to Make Direct Mutual Fund Plans the Default on AMC Platforms From November 1

Investors using mutual fund company websites will see direct plans set as the default from November 1. 

SEBI Chairman Tuhin Kanta Pandey said. Those who choose regular plans will be informed about their higher expense ratios,  

The announcement came alongside plans to review IPO rules, improve access to capital markets and expand the regulator’s use of artificial intelligence. 

IPO Rules and Fundraising Under Review 

SEBI plans to examine rules for main-board IPOs, follow-on public offers, SME IPOs and the Innovators Growth Platform. It is also reviewing listing and disclosure requirements, along with ways to improve access to public capital for emerging companies. 

Other areas under review include corporate bond markets and the listing timelines for REITs and InvITs. 

More AI in Market Monitoring 

SEBI intends to extend its Radar tool, which checks mutual fund and distributor advertisements, to other market intermediaries. It is also developing an AI system to analyse reports submitted by portfolio managers and asset management companies. 

Another tool is being tested to monitor disclosures and help identify early signs of corporate debt defaults. SEBI is also studying the feasibility of a domestically governed AI model for the securities market, with Pandey stressing that firms must remain accountable when using AI. 

Investor Awareness Still Low 

SEBI’s survey found that 63% of households knew of at least one securities market product, but only around 9.5% participated in the markets. Among investors, just 36% had moderate or high market knowledge. 

The regulator’s Project Jagruk campaign has recorded more than 25 crore impressions and over 18 crore social media views since its launch on October 5, Pandey said. 

Read More: Grindwell Norton Share Price Gains Over 4% After Q2 FY27 Earnings Results: Total Income Up 14.6% YoY! 

Conclusion 

The direct-plan default is the most immediate change, starting November 1. SEBI is also working on wider changes to fundraising rules, market oversight and investor awareness. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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