Sebi plans gift cards route to mfs for wider investor base

Mumbai: Markets regulator Sebi on Tuesday proposed introducing gift cards or gift prepaid payment instruments (PPIs) for investments in mutual funds to improve financial inclusion through onboarding of new investors in the space. Under the proposal, the purchaser of Gift PPI can gift the prepaid payment instrument to a recipient, who can then use the instrument to subscribe to mutual fund units, Sebi said in its consultation paper.

These PPIs will be funded only through electronic bank transfer or UPI from an Indian bank account with a validity period of one year from date of issuance. Sebi suggested a cap of Rs 50,000 per investor per financial year for investments made through gift PPIs. “The RTAs, on behalf of AMCs will track how much each investor has invested per AMC per financial year through Gift PPI, e-wallets and cash. If the transaction resulting from a Gift PPI redemption crosses Rs 50,000, the RTA will reject the transaction, and the PPI face value will be refunded to the issuer’s escrow account,” it added.