What happened
1 Finance, a Mumbai-based personal finance advisory and wealth-tech firm, has been cleared in principle by the market regulator, the Securities and Exchange Board of India (SEBI), to start a fund house, formally called an asset management company (AMC), under its MF Lite framework. The company announced this in a press release dated 19 October 2026.
It wants to begin operations in the fourth quarter of FY27 (January to March 2027). That timeline depends on finishing the remaining regulatory and operational steps and receiving SEBI’s final registration.
The proposed AMC will concentrate on passive funds, meaning index funds and exchange-traded funds (ETFs) that follow a market index instead of relying on a fund manager to pick stocks. The Economic Times described it as India’s first MF Lite AMC licence.
The in-principle approval is only a first step. It does not by itself allow the company to launch any mutual fund scheme.
What it means for you
For now, nothing changes for investors. 1 Finance has not announced the schemes it plans to launch or their expense ratios, which is the yearly fee a fund charges. You will have to wait for final registration and scheme details before you can compare its products with existing ones.
More passive fund houses could widen the choice of index funds and ETFs and may put pressure on costs, according to Mint. Lower expenses or better returns are not guaranteed just because more players enter.
When any new passive fund appears, the points to check are the expense ratio, the index it tracks, tracking error (how far the fund strays from its index) and, for ETFs, liquidity and trading costs. Passive funds still carry market risk, since their value moves with the index they follow. You can test how regular investing might grow using the SIP Calculator.
Jeet Marwadi, a co-founder and the managing director, said the fund house would sit alongside the firm’s advisory work, with emphasis on how money is split across assets, tax efficiency and steady investing habits. Chief executive Keval Bhanushali said the aim is simple, transparent and cost-efficient products. The company says it has more than ₹17,000 crore in assets under advice.
Background
SEBI introduced the MF Lite framework on 31 December 2024 to lower entry barriers for AMCs offering eligible passive schemes. Under the earlier framework, active and passive schemes faced a common set of rules on net worth, track record, profitability and ongoing compliance.
SEBI’s view, as reported by Mint, is that several requirements built for actively managed funds may not be needed for passive ones. The lighter framework aims to bring in new players, cut compliance requirements, increase market penetration and encourage innovation.
Not every passive product qualifies automatically. SEBI has set eligible categories and conditions, including rules on which indices schemes can track. To understand the basics, see our explainer on the mutual fund.
What to watch next
Watch for SEBI’s final registration, the schemes 1 Finance files, and their costs.
