Sebi Eyes Gift Cards and Prepaid Instruments to Boost Mutual Fund Investments The Securities and Exchange Board of India (Sebi) is considering a proposal to allow investors to use gift cards and prepaid instruments to make contributions to mutual funds, aiming to simplify the investment process and encourage wider participation. The regulatory body has suggested imposing a cap of Rs 50,000 per investor per financial year for investments made through such instruments. This measure is intended to prevent excessive use of these tools while promoting their adoption as a convenient investment option. Under the proposed framework, registered trading agents (RTAs) acting on behalf of asset management companies (AMCs) will monitor individual investments made through gift cards, prepaid payment instruments (PPIs), e-wallets, and cash. If a transaction resulting from the redemption of a gift card or PPI exceeds the Rs 50,000 limit, the RTA will reject the transaction. The face value of the redeemed PPI will then be refunded to the issuer's escrow account, ensuring compliance with the cap. Gift cards and prepaid solutions have traditionally been used for retail purchases, but their adoption has grown significantly in recent years due to the rise of digital payments. These instruments offer convenience, instant delivery, and enhanced security, making them increasingly popular among consumers. Sebi's proposal seeks to leverage this trend by integrating these tools into the mutual fund investment ecosystem, potentially expanding access to financial markets for a broader audience. The move aligns with efforts to modernize investment mechanisms and reduce barriers to entry for retail investors.#gift_cards #sebi #digital_payments #mutual_funds #prepaid_instruments
