The Securities and Exchange Board of India (SEBI) has introduced a draft framework that aims to modernize mutual fund operations by permitting certain third-party payments. One of the key proposals allows employers to invest in mutual fund schemes on behalf of employees through payroll deductions, applicable only to listed companies and EPFO registered firms. Employees must opt in for this arrangement, ensuring that investments are credited in their names. Additionally, SEBI suggests allowing Mutual Fund Distributors (MFDs) to receive compensation in mutual fund units rather than cash, which could foster a long-term investment approach among distributors. Another significant proposal enables investors to contribute part of their mutual fund investments or returns to social causes, either through dedicated mutual fund schemes or direct donations to registered NGOs, thereby simplifying the donation process. SEBI has stressed the importance of maintaining anti-money laundering controls throughout these new structures, including stringent KYC verification and electronic tracking of funds. The consultation paper is open for public feedback until June 10, 2026.