MF Lite Framework and Passive-Only AMCs in India

Tue, 12 May 2026 00:00:00 +0000

The MF Lite framework is a simplified regulatory pathway introduced by SEBI in 2021 for asset management companies (AMCs) that intend to offer exclusively passive mutual fund schemes – index funds, exchange-traded funds (ETFs), and fund of funds investing in ETFs. By reducing the minimum net worth requirement and simplifying certain governance obligations relative to the standard AMC registration framework, MF Lite lowers the entry barrier for new entrants focused on the passive investing segment and encourages competition in a space historically dominated by large, full-service AMCs.

SEBI Mutual Fund Lite framework (India)

Tue, 12 May 2026 00:00:00 +0000

The SEBI Mutual Fund Lite (MF Lite) framework is a simplified registration and operational regime introduced by SEBI in 2024 to encourage new entrants to establish asset management companies (AMCs) that offer exclusively passive investment products, index funds and Exchange-Traded Funds (ETFs), without the full regulatory burden applicable to active fund management. The MF Lite framework was finalised through SEBI’s circular and amendments to the SEBI (Mutual Funds) Regulations, 1996 in 2024, following consultation papers issued in 2022 and 2023. The primary policy objective is to increase competition in India’s passive fund segment (which has historically had fewer participants than the active segment), lower costs for investors, and enable fintech, technology, and financial services companies with strong distribution capabilities to enter the market without meeting the full net worth and track record requirements of traditional AMC registration. The framework is administered by the SEBI Investment Management Department .

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MF Lite Framework and Passive-Only AMCs in India

SEBI Mutual Fund Lite framework (India)