New SEBI Rule: Direct Plan to Show by Default on Mutual Fund Apps and Sites, Warning When Choosing Regular Plan
In investors' interest, a new SEBI rule came into effect on 1 November 2026. On asset management companies' websites and mobile apps, the Direct Plan of a mutual fund will now appear pre-selected. A warning about higher costs will also be shown if you choose the Regular Plan.
What Changed
Many investors earlier invested without understanding the difference between Direct and Regular plans. Under the new rule, the Direct Plan will appear by default on AMC websites and apps.
Direct vs Regular
| Point | Direct Plan | Regular Plan |
|---|---|---|
| How it is sold | Directly from the fund house | Through a distributor or agent |
| Expense ratio | Usually lower | Higher, as commission is included |
| Warning | Default option | Alert shown on choosing |
Purpose of the Rule
SEBI wants investors to understand the difference in commission and cost so that they decide wisely. Over the long term even a small cost difference can affect returns.
What Investors Can Do
- Check the plan name and expense ratio before investing.
- If you want an adviser's service, understand the fee and commission difference.
- Check the plan type of your existing investments in your statement.
Please Note
Frequently Asked Questions (FAQ)
Has the Regular Plan been discontinued?
No, it remains available, but a warning appears when chosen.
Why is the Direct Plan cheaper?
Because it carries no distributor commission.
Will existing investments change?
Reports say the rule concerns how plans appear on apps and websites.
Note: This information is written in our own words from various news reports and public notices, as of 1 November 2026. Prices and rules may differ by city, state and bank. It is not investment, legal or medical advice. For final information, check the official website of the department or company concerned. Emitrawala.com is not a government website.
