In a recently held meeting with CEOs of a few fund houses, SEBI has asked fund houses to follow the best practices circular in letter and spirit, say two CEOs who met the SEBI chief two weeks ago.
A CEO of a large fund house said that SEBI had asked fund houses whether they were adhering to AMFI best practices circular on the commission guidelines. In fact, the regulator has asked AMFI to ensure that all its members adhere to the circular in spirit as well.
Another CEO told Cafemutual that AMFI might come out with another best practice circular pushing for further rationalisation of the commission structure. “SEBI has been pushing fund houses to reduce cost and hence, AMFI may rationalise the commission structure of distributors,” he said.
A CEO, who is not on the AMFI board, said that it does not make sense for them to adhere to the best practices circular if decision-makers flout the norms. Even fund houses, which are complying with best practices guidelines on upfront commission in spirit, would back out if other members flout the norms, he added.
The issue of compensation given to RIAs and online channels to sell direct plans was also raised in the meeting.