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17 Jul 2012 07:00 AM
SEBI MF Advisory committee says no to entry load; moots AMFI as SRO 
Team Cafemutual
 

Committee makes a few recommendations to SEBI

The mutual fund advisory committee in its meeting today with SEBI suggested that AMFI could become an SRO to regulate distributors.  

For liquid funds, the committee recommended that the NAV should be allotted based on realisation of funds for investments below one crore. Investors were splitting applications to get the same day’s NAV if they wanted to invest one crore. It has asked SEBI to take strict action against this practise. It has also suggested SEBI to make portfolio disclosures mandatory on a monthly basis instead of every six months.

“The exit load has to be written back to the scheme and against which few basis points expenses can be charged by the scheme. There was a discussion on bringing fungibility and increasing total expense ratio also” said a committee member.

Sources say that no consensus was arrived on formulating an incentive structure for distributors.  “Entry load is not being introduced. SEBI will present the recommendations to its board,” says M S Apte, Investor Association - Lokmanya Seva Sangh.

The regulator is likely to present these recommendations to its board members for its approval.

 
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