United Forum has filed an appeal with Securities Appellate Tribunal (SAT) against SEBI on the commission disclosure issue, said two sources familiar with the development. United Forum is a federation of various IFA/distributor associations.
In its appeal, United Forum has opposed the recent SEBI circular in which it has asked fund houses to disclose commission structure of distributors in the half-yearly account statements in absolute terms.
United Forum has engaged Finsec Law Advisors to file this appeal against SEBI. Finsec Law Advisors had represented FPSB in the SRO case.
A few days back, a distributor was quoted in a Mint newspaper, “SEBI has been asked to file a reply in four weeks, explaining why the circular is in the interests of the market.”
Ever since the market regulator instructed AMCs to disclose commissions of distributors in the account statement, many distributors have vehemently opposed this move as they believe that this rule will be regressive and induce pass back practice by investors.
In fact, Cafemutual’s recent poll on impact of commission disclosure on adviser-client relationship shows that a majority of distributors (56%) feel that this disclosure would induce pass back from investors, another 29% felt that it would have no impact on their business and the remaining 14% said that it would actually help strengthen client-distributor relationship.
