This investment advisor gives Swiggy vouchers for starting micro SIPs; Sebi chief Buch says nothing illegal

Multipl is a Bangalore-based start up founded in 2020. According to the website, the platform rewards users for investing in for future expensives by partnerships with various brands and aims to provide users to invest for their future lifestyle saves.

A SEBI-registered investment advisor, operating under the name Multipl Wealth Management, has come under scrutiny on social media platform X for offering an incentive-linked investment scheme for Micro SIPs. The firm’s mobile app promotes a plan where investors can start seven SIPs (Systematic Investment Plans) of Rs 250 each and receive cashback in the form of Swiggy Money. Additionally, the app claims that investors can initiate an SIP with a short-term goal of spending with a specific brand, which would then invest on their behalf.

Speaking at an AMFI event to launch the Rs 250 small SIP, SEBI chair Madhabi Buch noted that  such marketing schemes were not illegal. She was responding to a media question on the app. According to Buch, investment products must adhere to a strict rule: they cannot provide any assurance of returns. She explained, "No one can guarantee a specific amount at the end of an investment period. If you ask whether such a scheme is allowed, the answer is no."

But on the other hand, she added that SEBI does not intervene in marketing and sales strategies of financial products, it instead enforces risk-mitigation measures. For instance, in the case of SIP-linked incentives, distributors do not receive rewards if an investor discontinues the SIP within two years. According to SEBI's consultation paper released in January this year, in order to incentivise distributors, MFDs and various execution-only platforms (EOPs) will receive a Rs 500 incentive for bringing in such SIPs. However, this payout will be given only after 24 SIP installments.

Buch cited the example of an investor going to buy a car. " For instance you have somebody who is selling a vehicle. I don't know if you ever bought a motorcycle or a car yourself. You would avail of the vehicle and the agent will tell you first EMI is free. So that is a mechanism where the distribution network uses the incentive that they have in order to use it in the best possible way that they believe they can get new people into the ecosystem. So we will never have a point of view on how you are using your incentive," she explained.  Buch added, "I think a little bit of healthy skepticism is good but a whole dose of trust in the ecosystem and the industry is also good."

Multipl is a Bangalore-based start up founded in 2020. According to the website, the platform rewards users for investing in for future expensives by partnerships with various brands and aims to provide users to invest for their future lifestyle saves.

An RIA on condition of anonymity noted that SEBI RIAs are required to seek approval from BASL (Now BSE) before putting out advertisements. It would be interesting to know whether BSE gave such approval or not?" he added. An MFD added that even though it may be allowed, this is a regulatory grey area as "RIAs as such are SEBI registered"

In an email response to Moneycontrol, C0-founder Paddy Raghavan said, "None of the people who are tweeting have used our product. If they would have used the App, they would have known that Multipl is following the investment advisory process as outlined in the regulations where we are suggesting the mutual fund allocation based on the user’s risk profile, time horizon of their goal and the current market valuations."