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MF News AMFI requests SEBI to allow upfront commission on SIPs registered before Oct 22

AMFI requests SEBI to allow upfront commission on SIPs registered before Oct 22

AMFI has sought clarification from SEBI on October 22 circular.
Nishant Patnaik Feb 11, 2019

In a letter sent to SEBI seeking clarification on the circular issued on October 22, 2018 that has banned upfront commission, AMFI has requested the market regulator to allow fund houses to pay upfront commission on SIPs registered before October 22.

On grandfathering of upfront commission on future instalment of SIPs registered prior to October 22, 2018, AMFI said, “Many AMCs had SIP brokerage structures which had a component of upfront commission to be paid for every SIP/STP instalment. It is requested that AMCs be permitted to continue paying such commission on SIP/STP registered prior to the date of the circular.”

AMFI has further sought clarification from SEBI if fund houses are right to interpret that they can send their distributors on skill development programs. AMFI said, “Management programs at leading institute for distributors, either in India or overseas to help them build their knowledge and business, in order to better serve customers.”

On loyalty programs, AMFI has sought SEBI’s help to understand if such programs would fall under non-cash benefits. Distributors earn certain points based on AUM/inflows with AMCs under loyalty programs. Such distributors are entitled to receive non-cash benefits from AMCs.

The new SEBI rule says that training sessions and programs conducted for distributors should be continued but not misused for providing any reward or non-cash incentive to them.

 

 

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20 Comments
Alagappan · 2 months ago
Yes this is a good move since there r so many sip running with entry load even after so many years, also Amfi must ensure that all r and t must not reduce the brokerage flat even for aum procured say 10 years and abv those days they were paying only 40 bps last year when they reduced the ter the commission was reduced by 25 bps flat which means the distributors were paid only 15 bps now when they further reduce the ter the amc will charge the advisor say 10 bps for having the funds
Also there is one other important point when kyc is not done they stopped the brokerage paid to the distributor they release the same after complete the kyc , there r several cases that when client redeem the funds in those folios the amc still does not release the brokerage they say non completion of kyc, in a customer point of view when he has withdrawn the funds why they will give kyc hence it is a huge loss for the distribution fraternity
Shashidhara SR · 2 months ago
Believing in distribution businesses proving costly and on the other hand talk of about self employment empowerment.
Tax Services-all on line and even if mistakes ,department takes time to reconcile shortage of staff&some cases refunds to frauds
Insurance -Agents have to sell at a higher price.O online and bank group policies priced cheaper.
Now MF fooling SEBI and AMFI distributors
Nilesh · 2 months ago
SEBI should allow upfront on all SIP as well as on Lumpsum investment. This will improve quality of service of distributor and also help us to tap small investors.
E Ravinder · 2 months ago
This is essential and it is required specially in B30 segment. Small IFAs are suffering much, they will get boost, if SEBI permits to do so. Think welfare and continuity in profession from these cities is most essential in growing mfs.

All will be thank full.
Bantadhar · 2 months ago
Ask sebi if it needs amount in donation for invester protection from ifas. Hum to gurudware mein free langar kha lenge
HARISH CHANDRA · 2 months ago
U R RIGHT BHAI
Reply
Anish · 2 months ago
I had completely stop MF business only I m focusing on Mediclaim and LIC due to all this SEBI issues...
Vishal Rastogi · 2 months ago
Aacha hota ki sab par hi Up front commission phir se laya jata......... Aisa toh krna hi parega aaj nahin toh Kal....... phir intezar karne se kuch nuksaan hi hai , lagu karne se phyeda hi phyeda ......!
Ranjan · 2 months ago
SEBI did not calculated the implications of stopping upfront commission. It is evident from the 61%drop in equity investment since November 18 just after SEBI ban upfront commission. Now see the consequences. ...When the inflow in equity fund is less. AMCs will not be able to lend support when there is heavy selling pressure ultimately result in DRASTIC fall in equity market and erosion of investment value of investors.Is it better to encourage this erosion of WEALTH or allow investors to bear little cost as to ensure healthy return? Can any body in SEBI committee can reply my question?
Reply
Vishal Rastogi · 2 months ago
5 month trailer has sowed fear of AUM errosion... if waited a long what will happen when really people will mvanish from Mkt...... Think & Grow Fast !
Sadiq · 2 months ago
Sebi is focuy on small UFAs they very sincerely doing their wealth creation for investors and their families. Also depends on the upfront commission...in the recent days do many malkyas and chooksi Neerav s are looting banks public money..
Shweta Maheshwari · 2 months ago
SEBI has taken a right move by debarring Upfront, it is good for investors long term money. As far as distributors are concerned ,they need to focus on right direction and think long term for clients. IFA fraternity needs to understand that earning money is not simple . I am happy to see that churning has stopped and now IFA are forced to think for investors instead of themselves.
Sandeep · 2 months ago
One can not reach or jump to the conclusion that all IFAs were doing churning of their investers portfolio. The fact is that there were only few such culprits but the punishment is given to all. A motor that requires 220 volts to run is provided with only 20 volts. How will it run? How will it pick the acceleration? Even In small cities and town, to pick a single SIP, it takes lot of effort, time, gasolene and educating an invester always remains a big challenge. There are many aspects that SEBI has missed while making the decision.
Reply
Solomon · 2 months ago
AMFI finally woke up, realising if IFAs are not there, it won’t exist either.

SEBI has been a big, very big problem.

Not only have the been bringing sudden changes to MF industry on behalf of LIC and cronies.

First they cut upfront, then scheme classification, LTCG, TER, Service Tax, Stamp duty. Though some are also on behest of FM, finally you have markets with high volatility, poor returns, Diminishing IFAs and lower Rupee.

SEBI congratulations on the F@ck up.
Panchu Charan naskar · 2 months ago
In Mutual Fund, Capital Gain Tax is applicable . But in ULIP policies similar to Mutual Fund except some solace of Insurance Coverage the Captial Gain Tax is Nil. Even the commission structure is far better than Mutual Fund. Market Regulator should be taken into consideration all these aspects during fixation of commission structure.
Rajesh jaiswal · 2 months ago
SEBI is doing experiment on mutual fund business and distributors which shows from Nov.18 to till date,business is going continuous down month on month because ban of upfront commission maximum distributors move in other segment.And for all SEBI is fully responsible
Jagdish prasad sahu · 2 months ago
Are ye to ham logo ko sath galat ho raha hai
Subhasish Mondal · 2 months ago
SEBI have to think again and again before forced lakhs of IFA to unemployed in name of the investor's profit. In our country where millions of youth are unemployed, a government body is taking such a decision that can be fetal for both investor and individual distributor. I being a villagers experienced how tough to make my client deciding to invest in Mutual funds., And to complete a SIP.
1000 ki SIP me bass 3 rupiya, bhikhari vi 5 rupiya se kam nehi lete...
Ajay Chaudhary · 2 months ago
SEBI ne SIP par Upfront commission stop kar diya.... Kuchh Investor ka kehna hai ke Sahi hua.. Cost saving higi... Kuchh IFA ka kehna hai ke Galat hua... New small Investor ko tap karna Cost efficient nahi hoga...
Muze aisa lagta hai ke... Upfront New SIP First year ke liye hota hai to IFA ko dena chahiyr.. Aur rahi baat Trail commission ki to usme jo katauti hue hai woh long term ke liye Investor point of view ke hisab se sahi hai.... IFA ko cost efficieny service after sales mein nahi hogi....
Khali Television advertisement "Mutual Sahi Hai"se Investor nahi badenge...
Socho Sahi... Karo Sahi...
IFA hai to MF industry hai....????
Ratan saha · 2 months ago
I think Sebi should continue upfront commission in all sip. The Mf industry as well as stock market have in their well position due to our (IFA's) continuos support and sales.So it's my humble request to start upfront atleast for sips.IFA hai to market mein dam hai warna market positive response nahi karegi.
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