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  • MF News Now, AMCs will have to disclose management fees along with your commission

    Now, AMCs will have to disclose management fees along with your commission

    SEBI has asked fund houses to disclose investment and advisory fees and other expenses along with the commission of distributors.
    Nishant Patnaik Oct 23, 2018

    In a bid to increase transparency in mutual funds, SEBI has asked fund houses to disclose investment and advisory fees and other expenses along with the gross commission of distributors with immediate effect.

    Simply put, the half yearly consolidated account statement (CAS) will now have two more columns for the disclosure of management fees and other expenses along with the gross commission paid to distributors. However, the market regulator has not clarified if such disclosures will be in percentage terms or absolute terms.

    Anuj Kumar, CEO, CAMS believes that fund houses will have to disclose such disclosures in percentage terms. “Since there is no mention on this it is better to disclose such expenses in percentage terms.”

    However, a few experts have a different view. “Since fund houses have been disclosing gross commission of distributors in absolute terms, they will have to disclose management fees and other expenses in absolute terms to maintain uniformity.”

    In a press release SEBI said, “The scheme’s average total expense ratio (in percentage terms) along with  the  break  up  between investment  and  advisory  fees,  commission  paid  to  the distributor and other  expenses  for  the  period  for  each  scheme’s  applicable plan  (regular  or  direct  or  both)  where  the  concerned  investor  has  actually  invested in.”

    This commission figure includes all direct monetary payments and other payments made in the form of gifts/rewards, trips, event sponsorships etc. by AMCs to distributors. Also, this disclosure come with a footnote that reads, “The commission in Col 9 above indicates gross commission received by the distributor against the respective investment and does not exclude costs incurred by distributors such as service tax (wherever applicable, as per existing rates), operating costs, etc.”

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    39 Comments
    Bajrangi Chaubey · 5 years ago `
    I think the sebi is determined to ruin mutualfunds industry instead sebi shuold encourage distributors so that most people move to invest in mf as compared to other sectors people participating in mutual funds are less.I would like to appeal sebi head to work without wages and allowances himself then give a lesson to others.
    Satya Prakash · 5 years ago
    You are absolutely right.First SEBI chairman work without his salary,and others allowens .
    aNKUR · 5 years ago
    you are right
    ankur · 5 years ago
    SEBI one side cuts the commission of MF distributors and other did not reduce the renewal fess he should also think about it . Already comm is very less still SEBI did not want them to survive in the market and customer is only want his benefit how the distributors cost will recover the comm will decline continue this way. Dear start twit on twiiter to the sebi .
    Reply
    Satya Prakash · 5 years ago `
    I apeal to all mf distributer for all over India. to no sell mf schemes . Perhaps SEBI chairman sell mf schemes .All of our mf distributer to take lesson to LIC Agent.
    Rakesh · 5 years ago
    You are right. He should be made Starve without a single penny. SEBI chief made lot of people unemployed and helpless. They are helping only big distribution houses and big distributors and killing small ones. Shame on you SEBI Shame on you
    Reply
    Koushik Chatterjee · 5 years ago `
    I think all expenses as like salary, incentives travelling allowance of all staff & other dignitaries of AMC, AMFI, SEBI's should be disclosed. Because that will be expense from investors investment.
    Paresh · 5 years ago `
    Sebi is now behind Mf distributor saying not to sell MF every month coming out with new regulations and conditions
    Anish · 5 years ago `
    I am going to sell LIC ULIP plan...we are not here to do charity...SEBI is mentally ill..sebi is not having time to resolve IL&FS issue ....
    t devendra · 5 years ago `
    SEBI has no values for democratic substance. it throttles the core due to administrative lobby headed by IAS, who cannot understand the market behaviour and more so passes gazettes rather than holistic way of looking things. poor ifas dependent on this profession are stubbed day in and day out due to connivance of top brass. this should looked as an employment opportunity for some as the government cannot provide the same. it is the IFAs who made this country proud by the wherewithall of FII, Fpi business and brought respect to indian market. the gratitude is autocratic behaviour while going scot free with the big wigs it is the bane of regulators in dwindinling of mf industry with so many conditions. at a time. the govt needs to relook into this
    ROHIT SUTHAR · 5 years ago `
    Sebi has to declare all expenses as like salary, incentives travelling allowance of all staff & other dignitaries of AMC, AMFI, SEBI. And we are earning nominal commission. Insurance agent commission is higher. We facing claw back, gst issues, and lost of up front also. Recently mutual funds selling is too tight to sell. People are unsecure with returns. Market is totally unfavorable. Sebi is forcing again and again on distributors. ABHI TIME AA GYAA HEI SABHI DISTRIBUTORS KO EK HO JAAYE.... NAHI TO HAME DHIRE DHIRE KHATM KAR DENGE.......
    Deepak Patil · 5 years ago `
    Why only mutual fund industry requires so much transferency why not any other field, there are huge profits involve in many different industries such as pharma industry where there is huge difference between cost of production of medicine and final sale price to consumer? Why they should not disclose who gets how much profit in the distribution chain, rather this is the most important concern as this is directly related to life of human being. Some of IMP life saving medicines are costs only 8 to 10 thousands and sold to final consumers for more than lakh rs. Why? Why people should not get complete transferency there, also in many other fields? Why only mutual fund industry? I am not against transferency. But the laws, rules and regulations should be same for everyone. Why only mutual fund industry? Why?
    V.Chakrapani · 5 years ago `
    SEBI AND ALL IT'S officials SHOULD TAKE THE initiative of disclosing their entire salary giving detail's of each item(gross)
    If they fail the finance ministry should step in to set matter the right
    Some members saying that other industries are paying high remuneration
    Don't being this .It appears some vested interests want everything to be rejigged.
    Rajesh · 5 years ago
    I request all distributors not sell MF and give fresh SIPs.whats that use of earning pennies as trail on an AUM of lakhs.
    Instead if you sell same amounts LIC policy you will get 7-15% commission.
    Vikas · 5 years ago
    Me to more focus on selling LIfe insurance products
    Reply
    ANSHUL · 5 years ago `
    SATYA SIR U R RIGHT
    Anil kale · 5 years ago `
    Lets hope that the reduced TER and other regulations does not make the AMCs to compromise on their product quality.Obviously they now cannot attract the top talent in the fund management and marketing depts neither there will be attraction for the individuals to plan a longer term career in mf distribution.Everyone will be busy in adhering to regulations and give less time to do actual business development.
    jATIN PAREKH · 5 years ago `
    SEBI and AMCs have come togather I think. AMCs want to save their expenses on commission that are in lakhs in amount and they are following every rule of SEBI when it comes on direct effect on distributors. They are promoting direct plans so the channel of IFAs or distributors totally fall and they save a lot of money that they are paying as commission. Even in mutual fund sahi hai campaign they are showing advertisment of direct plan.
    If want so called transparency of every investor why not Insurance industry too have to disclose their expenses including LIC? Still major part of indian public are not into MF as investors. SEBI should protect IFAs and Distributors rather encourage them to bring more ppls into this industry. But, I think they are satisfied with current numbers and don't want more money to get invested into MF industry.
    FIFA and IFAs have to come togather and keep our points ahead of SEBI and AMCs.
    feby Joseph · 5 years ago `
    This Decission of SEBI will only increase Unemployment in the country. Then they forcing take away the food of such small distributors......Where is the Fair Practice and Transparency? Regulator should have put on nose on NSELT Scam of Rs 6,000 Cr...
    So Compared to Developed Countires USA, Korea........Where it stand our economy, it just developing only!
    I don't think IFA's will work as social Service rendering everything on Free Service.
    So, what is the right intention, Is they acting like Wolf in sheep's clothing........!

    Feby Joseph · 5 years ago
    The Regulator Body and AMFI Body ignored the Basic Values.... Present generation are tomorrows Nation..... students are educated to get a Job after their studies on Marketing and Consumer Behaviour.
    Am confused, Why they ignored......of Philip Kotler and Peter F Drucker?
    Reply
    Ajay Sharma · 5 years ago `
    Tiagi should himself be asked to “Tyag” his salary by 10% every year. Since Sebi fees are also part of the TER, the Sebi fees along with salary of Sebi Chief also should be made public.
    Also, the IT returns of the Sebi Chiefs Family members and relatives should be made public so that public can come to know if they are corrupt/ or not.
    They allow & “write off” scams worth thousands of Crores and go after “peanuts”.
    Ideally peanuts are preferred by monkeys. Wonder why is Sebi going after peanuts.
    Shashi · 5 years ago
    Great ajay ji
    Reply
    Manish · 5 years ago `
    SEBI is playing the role of cruel dictator who does not care for distributors. I think the entity feels that distributors are not humans and they will rely on air n water to feed their families.
    It was distributors only who are working from day once since inception of mf industry.
    Where the distributor will go who totally rely on mf business??
    A big shame to SEBI.
    CATCH THOSE DISTRIBUTORS WHO MISSELL.
    CATCH BANKS AND FINANCIAL INSTITUTIONS.
    #SHAMESEBISHAME
    Aleshi · 5 years ago `
    Good opportunity except Mutual fund , sell Life or non life products , .. thanks to SEBI
    DEBRAJ Sengupta · 5 years ago `
    I read most of the comments and agree with some of them. I laud SEBI move to disclose the AMC FMC alongwith Distributor commission in CAS b'cz the marketing people of AMC ambush sales close ended and NFOs and people appointed to sell Direct schemes to be brought under day light. At the same time I believe there should be public disclosure of Trustee Fee, AMC management salary etc in public domain. If we have decided to strip in public in term of fees and cost then why should all not bare All. So does SEBI official. Finance Ministry and officials who are at the helm of the affair should call upon other industry like Insurance,Company Deposit, Brokerage houses etc. to discuss similar type of Disclosure. It should be mandatory for Insurance Industry to disclose All clubmembership costs, rewards and recognitions, agent commission etc. In a yearly manner to All policyholders alongwith the cost impact on their policy benefits. Ditto for other Industry as well. This will create level playing field and distinguish Men from Boys.The move by SEBI is also commendable as Banks,NDs, Big distributors have often squeezed the AMCs to get over and above Normal Brokerage.
    CONRAD · 5 years ago `
    What's Happening With This Person , We Take The Trouble To Get Business & Now You Say No Up Front Commission & To Disclose Our Commission , You Guys Have The Best , With No Asker Or Teller , Great Work Guys , Take Away All We Have....
    KARUR SRIDHAR RAM · 5 years ago `
    Great to see the fancy, arrogant rules of SEBI as it want to prove itself as one of the best regulator in the world by doing all haphazard circulars. It should even disclose how much the TER and it should give respective break-up of each head like: management fees, registrars fees, custodian charges, auditors fees and distributors commission and above all of these it should even disclose how much there is a charge of IGST on all of these. Then only, it can become crystal clear or else everyone is blaming advisor as if we are the real culprits. On the contrary, for our renewal of licenses our AMFI/CAMs is charging fees and on the other hand we have to work day and night for free and contribute to this arrogant Government coffers. Great governance mechanism by this hopeless government and all its wings. and it is not letting any stone unturned in squeezing the blood of innocent advisors.
    Dixesh shah · 5 years ago `
    I request all distributor to write a mail to prime minister related to the issue...you will get mail id from google as "write to pm"...write in details about the mutual fund industry and game plan of sebi head and big mutual fund houses to increase their profit...
    Rakesh · 5 years ago `
    SEBI=security exchange behind idiots.
    PREM KUMAR · 5 years ago `
    I think SEBI Chairman has some stake on different AMC's that is why he is churning out the small earnings of MF DISTRIBUTORS so that he will get more profit from AMC'S.
    PREM KUMAR · 5 years ago `
    I think SEBI Chairman has some stake on different AMC's that is why he is churning out the small earnings of MF DISTRIBUTORS so that he will get more profit from AMC'S.
    Abhishek · 5 years ago `
    Mr tyagi is thinking himself to be too smart ....I request Mr tyagi to disclose his monthly salary n sop's in the public domain....day n nyt we worked we have ran at the back of the client like anything so much of expenses is incurred to add 1 client what do Mr tyagi will know he is sitting in a govt AC room n enjoying his dictatorship along with his amfi friends ......Mr tyagi must nver forget he has got curse from the ifa faternity....as we were able to earn our bread n butter bt now we all with our family will be starving ...... God will never bless this man along with his amfi frds .....all the best wishing u a grt life ahead
    Abhishek · 5 years ago `
    Mr tyagi is thinking himself to be too smart ....I request Mr tyagi to disclose his monthly salary n sop's in the public domain....day n nyt we worked we have ran at the back of the client like anything so much of expenses is incurred to add 1 client what do Mr tyagi will know he is sitting in a govt AC room n enjoying his dictatorship along with his amfi friends ......Mr tyagi must nver forget he has got curse from the ifa faternity....as we were able to earn our bread n butter bt now we all with our family will be starving ...... God will never bless this man along with his amfi frds .....all the best wishing u a grt life ahead
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