MFDs entitled to get trail commission on transferred SIPs without any waiting period

Dear Sir/Madam,

One of my clients wishes to transfer his assets from another distributor to my ARN. He is an SIP investor with seven active SIPs. I would like to know how the cooling-off period applies to SIPs after the transfer of AUM. Will there be no brokerage on SIPs for the first six months?

Chetan Suryawanshi, Nashik MFD

Dear Chetan,

According to the AMFI best practices guidelines, AMCs can only pay trail commission after cooling off period of six months from the date of transfer of assets by investors.

However, such a norm is applicable only on assets build before the transfer of assets of investors.

Since SIP transactions occur after the transfer, MFDs are entitled to receive trail commissions on such assets from day one. This also applies to incremental lump-sum investments.

For example, if the asset transfer occurs on January 1, 2025, MFDs will receive trail commissions on any new business, whether through lump-sum investments or SIPs, starting from January 1, 2025.

We hope this addresses your query.

Regards,

Team Cafemutual