The industry had discussed various types of loads with SEBI
during the meeting on 3rd May.
It is learnt that SEBI is not keen on
re-introducing the entry load in the original format, says a CEO of a mid-sized
fund house who met SEBI recently. Yesterday, distributor associations have
requested SEBI to bring in a variable load. Some are of the view that there
should be different loads for equity and debt funds.
Mutual fund CEOs have given their feedback to
SEBI over the last few days. AMC CEOs are meeting SEBI one by one to discuss
the issues faced by them. SEBI’s main agenda for the meeting is a discussion on
the ways to increase the revenue and penetration of mutual funds. Yesterday, a
CEO of a small fund house requested SEBI to hike exit loads and relax KYC and
KYC and particularly in-person verification
(IPV) has become a major hindrance for distributors.
SEBI allows AMCs to charge up to 6% exit
load. Exit loads help AMCs to deter investors from early redemption. Anything
charged above 1% has to be written back to the scheme. However, no AMC has
introduced such a high exit load so far as they fear a higher exit load can
also put off some investors from investing. AMCs are allowed to use 1% exit
load collected from investors exiting before one year for marketing and