More than 300 distributors will heave a sigh of relief, as the list of distributors meeting the due diligence criteria has reportedly shrunk to 220-odd from 529.
The list of 529 distributors has been trimmed to roughly 220 now as a result of rectification of error, inform two senior industry officials familiar with the issue.
Apparently, RTAs had erroneously compiled the list of distributors having their clients spread across 20 locations, instead of compiling a list of distributors having offices in more than 20 locations. The error was only recently detected. AMFI is likely to publish an updated list of distributors who will come under due diligence scanner soon.
Many distributors are relieved as they felt that their scale of operations did not warrant a time-consuming exercise.
SEBI has stated that due diligence will be initially applicable for distributors satisfying one or more of the following criteria:
- Multiple point presence (more than 20 locations)
- AUM raised over Rs. 100 crore across industry in the non-institutional category but including high net worth individuals (HNIs)
- Commission received of over Rs. 1 crore p.a. across industry
- Commission received of over Rs. 50 Lakh from a single AMC
