BENGALURU, July 1 (Reuters) - India's market regulator proposed a series of easier rules for passively managed mutual fund schemes on Monday, looking to reduce the compliance burden, encourage competition and ease the entry of funds seeking to launch only less risky schemes.

The proposed rules could be an incentive for asset managers like Vanguard to enter the Indian market. Last July, Blackrock , the world's largest money manager, tied up with Mukesh Ambani's Jio Financial Services, to launch a fund house in the country.

Fund houses can hive off their passive mutual fund schemes -- which replicate indexes and leave less discretion for fund managers -- to adhere to less strict rules and reduce compliance costs, the Securities and Exchange Board of India (SEBI) proposed in a paper seeking comments.

Passive funds will have relaxed portfolio disclosure requirements, scheme disclosures and advertising code, the regulator said.

The SEBI is also seeking to reduce the net worth requirement for asset managers managing only passive schemes to 350 million rupees ($4.20 million) from 500 million rupees earlier.

It proposed lowering that requirement further to 250 million rupees if the asset manager was profitable for the past five years.

The regulator has also proposed introducing hybrid passive funds, which will replicate a composite index comprising fixed proportions of equity and debt, the paper said.

The SEBI has invited comments on the proposals until July 22. ($1 = 83.4301 Indian rupees) (Reporting by Chris Thomas and Jayshree P Upadhyay; Editing by Savio D'Souza)