New Delhi, May 20 -- The Securities and Exchange Board of India (Sebi) is considering allowing third-party payments-such as employers investing on behalf of employees-in mutual funds, as it looks to ease transaction norms while retaining safeguards against risks such as money laundering.

In a consultation paper issued on Wednesday, the market regulator said third-party payments in mutual funds can be allowed in certain scenarios such as payment of salaries by employers and payment of commissions by asset management companies (AMCs).

The proposal marks a departure from current regulations that require that all mutual fund transactions must happen with the investor's verified bank accounts, to enable maintenance of a digital trail. The ru...