SEBI, through its circular dated February 20, 2025, has clarified provisions related to investor education and awareness initiatives by mutual funds. As per Chapter 10 of SEBI’s Master Circular (June 27, 2024), Asset Management Companies (AMCs) must allocate at least 2 basis points from their daily net assets, within the total expense ratio limit, for investor education. SEBI further clarified that these initiatives may include financial inclusion programs approved by SEBI. The circular is issued under Section 11(1) of the SEBI Act, 1992, and Regulation 52 of SEBI (Mutual Fund) Regulations, 1996, with the aim of protecting investors and regulating the securities market. The circular is available on SEBI’s website under the “Legal — Circulars” section.
Securities and Exchange Board of India
Circular No. SEBI/HO/IMD/PoD1/P/CIR/2025/21 | Dated: February 20, 2025
To,
All Mutual Funds
All Asset Management Companies (AMCs)
All Trustee Companies / Boards of Trustees of Mutual Funds
Association of Mutual Funds in India (AMFI)
Sir/ Madam,
Subject: Clarification regarding Investor Education and Awareness Initiatives.
1. Chapter 10 of the SEBI Master Circular dated June 27, 2024 on Mutual Funds (“Master Circular”), which specifies the provisions for loads, fees, charges and expenses charged by Mutual Fund schemes, inter alia requires AMCs to annually set apart atleast 2 basis point on daily net assets within the maximum limit of total expense ratio, as per regulation 52 of SEBI (Mutual Fund) Regulations, 1996, for investor education and awareness initiatives.
2. In this regard, it is clarified that initiatives under ‘Investor Education and Awareness’ include financial inclusion initiatives, as may be approved by SEBI from time to time.
3. This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provision of Regulations 52 of SEBI (Mutual Funds) Regulations, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
4. This Circular is available at sebi.gov.in under the link “Legal —Circulars”.
Yours faithfully,
Peter Mardi
Deputy General Manager
+91 – 22 – 26449233
peterm@sebi.gov.in