AMCs can charge additional 30 bps applicable on B30 cities only on assets from retail investors.
In a circular issued yesterday, SEBI has clarified that retail investors are those who invest up to Rs.2 lakh per transaction. SEBI said, “It has been decided inflows of amount up to Rs.2 lakh per transaction, by individual investors shall be considered as inflows from retail investors.”
So far, AMCs had to consider new inflows from B30 cities. There was no need to segregate assets based on individual investors category i.e. retail investors and HNIs.
Upfronting of trail commission on SIP inflows
SEBI has allowed upfronting of trail commission on SIPs of up to Rs. 3.000 per month per investors.
This is applicable across all schemes activated before October 22, 2018, i.e. before date of implementation of the SEBI circular on distributor commission.
Simply put, you will get 1% commission on SIPs of up to Rs.3000 for three years in advance. However, this will be applicable on SIP contribution from first time investors based on PAN. For instance, if a first time investor starts SIP of Rs.3000 for three years, distributors will get close to Rs.1080 as upfronting of trail commission.
Further, SEBI clarified such an incentivisation is applicable only on first SIP. This means, even if investors start multiple SIPs, you will get upfronting of trail commission only on his first SIP.
Also, AMCs can pay this upfront commission from AMC’s books.
In case claw back due to discontinuation of such a SIP, AMCs will have to recover it on pro-rata basis from the distributors.
No entry load on SIPs
SEBI has clarified that there will be no entry load on SIPs stared before August 1, 2009. So far, entry load is not charged on SIPs and lump sum investments started after August 1, 2009.
These changes will come into effect from April 15, 2019.
