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13 Jul 2011 12:00 AM
No transfer of trail if IFAs shift assets to online distribution platforms, AMFI decides 
Ravi Samalad
 

AMFI in its board meeting held on Tuesday has decided to keep the existing trail commission guidelines unchanged

Mumbai: The move comes after a leading online distributor proposed to AMFI that trail commission be given to it if existing distributors shift their partial or full client base to its platform.

“We don’t agree with that. The rule will remain the same,” says H N Sinor, CEO, AMFI.

AMFI has also decided that the trail commission will not go to new distributor if the existing distributor voluntarily opts out of business. The unused trail would continue to be used for investor education activities as per SEBI’s mandate.

AMFI’s decision to stop trail commission to both distributors in the event of ARN code change has drawn mixed reactions from the industry. Some felt that logically the trail should be passed on to the new distributor if the case for a change is genuine and is initiated by clients on account of improper services or advice given by existing distributor. Others agree with AMFI’s decision considering the fact that there were a lot of unfair asset transfers among distributors to grab trail commission.

Cafemutual had yesterday reported that AMFI is likely to take a decision on trail commission. Read here: AMFI may tweak trail commission rule

Are you in sync with AMFI board’s decision? Do let us know.

 
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