SEBI Removes ₹10,000 Minimum Subscription Requirement for Mutual Fund Distributor Transaction Charges [Read Circular]
SEBI has scrapped the Rs. 10,000 minimum investment requirement for mutual fund distributors to earn transaction charges, effective August 8, 2025.
![SEBI Removes ₹10,000 Minimum Subscription Requirement for Mutual Fund Distributor Transaction Charges [Read Circular]](https://images.taxscan.in/h-upload/2025/08/09/2074854-sebi-mutual-fund-distributor-fee-taxscan.webp "SEBI Removes ₹10,000 Minimum Subscription Requirement for Mutual Fund Distributor Transaction Charges [Read Circular]")
The Securities and Exchange Board of India ( SEBI ) issued a circular dated August 8, 2025, removing Rs. 10,000 minimum subscription requirement for mutual fund distributor transaction charges. According to Circular No. SEBI/HO/IMD/IMD-RAC-1/P/CIR/2025/90, the earlier rules in paragraphs 10.4.1.b and 10.5 of SEBI’s Master Circular for Mutual Funds dated June 27, 2024...
The Securities and Exchange Board of India ( SEBI ) issued a circular dated August 8, 2025, removing Rs. 10,000 minimum subscription requirement for mutual fund distributor transaction charges.
According to Circular No. SEBI/HO/IMD/IMD-RAC-1/P/CIR/2025/90, the earlier rules in paragraphs 10.4.1.b and 10.5 of SEBI’s Master Circular for Mutual Funds dated June 27, 2024 allowed Asset Management Companies (AMCs) to pay distributors a fixed transaction charge only if an investor’s subscription amount was ₹10,000 or more.
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SEBI reviewed the matter after a public consultation paper was released on May 18, 2023, and further discussions were held with the industry on June 11, 2025. Based on the feedback received, SEBI decided that the minimum subscription-linked transaction charge requirement should be removed entirely.
The new circular deletes the specific provisions (paragraphs 10.4.1.b and 10.5) from the Master Circular. AMCs can now determine how and when to pay transaction charges to distributors without being bound by the earlier Rs. 10,000 threshold.
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SEBI clarified that mutual fund distributors act as agents of AMCs and are entitled to be remunerated for their services but the method and conditions of such remuneration will now be more flexible.
This circular takes effect immediately, meaning that from August 8, 2025, mutual fund distributors can earn transaction charges regardless of the subscription amount.
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