MF News AMCs cannot spend IAP corpus on distributors’ clients: SEBI

AMCs cannot spend IAP corpus on distributors’ clients: SEBI

The market regulator has asked AMCs not to run IAP campaigns on distributor platforms, magazines, and so on.
Nishant Patnaik Apr 15, 2019

SEBI has asked AMCs not to spend IAP corpus on mutual fund distributors to create awareness about mutual funds among their clients.

In a letter to AMFI, SEBI has pointed out instances where AMCs have used IAP corpus to create awareness among distributors’ clients through the distributor websites or magazines. SEBI said, “It has been observed that AMCs are conducting IAPs on distributor’s platforms viz. web banner, distributors sending e-mailers to investors, publishing education advertisement in monthly magazine of distributors etc.”

The market regulator has clarified that such IAPs create awareness only among clients of distributors or RIAs instead of direct plan investors and new investors. SEBI said, “The cost incurred on IAP initiatives through distributors or investment advisors shall not be charged to IAP corpus i.e. 1 bps earmarked by the AMC.”

A CEO requesting anonymity explained to Cafemutual that AMCs cannot fund IAP conferences of IFA associations if such events are restricted to their clients. However, if they hold such events for investors at large, AMCs can use IAP corpus to fund such events.

SEBI has also asked AMCs to use other modes to reach out to people at large.

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subhash sharma · 5 days ago
Mohit tolani · 5 days ago
Direct investors are getting knowledge through direct advertisement like tv ads, newspaper ads, posters n etc by AMFI & other by many other AMCs. Distributor are doing so much of hard work to acquire clients & giving services to them. We distributors put all our heart , mind & energy for clients to give them better asset allocation . Clients even don't know about the asset allocation process they only knew about direct & indirect but thing is who will give them the better asset allocation ??? SEBI is disclosing distributors commission like we are stealing something from clients , AMCs pay because we work . Lastly SEBI should also disclose their employees salary , fund managers salary , AMCs profit SEBIs CEO's salary because if they want transparency so that should in a more appropriate way..

Thank You
Girish Changulani · 5 days ago
Well Said Mohit Sir ????
Shankar Lal · 4 days ago
Very well said Mohit ji
jayanta · 4 days ago
definitely ....
Mohit tolani · 1 day ago
Thanks Girish , Shankar & Jayanta ji ????
jayakanthan · 5 days ago
Better to quit mf industry
Raghuveer · 4 days ago
If u r only into MF distribution what u said is absolutely right to quit the industry. We HV to diversify to survive. We can take up loan syndication which is quite attractive proposition
Pavan Jaggi · 5 days ago
?? ?? AMC ???? ?? ???? ??? ?? ?? ?? ?? ? ?? ?? ??
jitendra · 5 days ago
I feel SEBI is thinking that we distributors are earning more than any industry in the country why always sebi is creating trouble for distributors our bread and butter is MF business initially they have introduced direct plan then reduction in TER and AUMbased reduction in TER. daily some new stupidity is done by sebi
A K Singh · 5 days ago
SEBI role is to be defined by suitable approach of legal bodies. The AMCs should come forward and speak about the process of fund procurement with needed expenses. It is a matter of transparency. The office expense, staff expense, promotion expense which is actually a combination of Distributor expense and different media expense altogether are important and cannot be rated differently in the collection of fund. SEBI should understand this integrity and should respect the position of all elements as family member Hope to see AMC stand and daring declaration against any step which affected the unity integrity of this system the MUTUAL FUNDS.
Deepak Singh · 4 days ago
It's really sad to see such order from SEBI. If AMC will not use distributor for IAP how they will spread Awareness of MF. Should every AMC start one new vertical for IAP. Then who will bear the cost. Are distributors of MF are earning more than distributors of other industry, like Pharma, FMCG, Insurance etc. SEBI should think.
prashant · 4 days ago
Haha...this means that distributor's customers are not AMC's customers than why and how does SEBI allow conversion of regular to direct plans. This is poaching of distributor's customers and competition controller should take a strict action against SEBI, AMFI and all AMCs. Crtelisation of businesses is happening here surprisingly with the help of a regulator which needs to be stopped at any cost or crore4s of investors will be duped.
Avijit kushari · 4 days ago
It's better to Quit Mf business
Suresh Kamath · 4 days ago
Service to clients in the mutual fund industry segment is going to be a charitable event in the days to come with SEBI getting critical on all aspects of the distributor and industry relationship. Miserable to see this stance.
Vishal Rastogi · 4 days ago
Very nice step... they still need to check that few of bigger distributors r still paid many perks through many other ways........... !
Suresh Kamath · 4 days ago
Vishal Ji, perks are secondary now, survival is paramount. Service and business will not be valued enough. SEBI seems to be constructive but have to see the future of distributors as we are surely pillars of the industry else ban distributors completely. End game Distributors and end game MF industry growth.
DEVESH SURATKAR · 4 days ago
SEBI director are bulsheet as with out concern doing step n act. If they understand the following abroad system adopted but the ruling director and operators with mind Indian. It will hampers the business.I am confident again all wise customers came to distributors for advice. Monkeys who sitting in SEBI. Better to leave the industry.chutiyo ke Saath desh dubega.
sanjay shah · 3 days ago
The sebi allows sifoning from market thru arbitrage funds and thru option trading by fii and large hnis.that it self is too large. and they have provided data that we mf distributors earn over 25 years lakhs.
good joke.
in 25 years what they will earn. pl. let me know sebi sir.
mohammed faisal · 3 days ago
no need to worry make a unique lobby and protest any action which can harm over livehood we also have right to equal business and we can put cci to this issue where distributor face problem like both regulatory issue and large corporate or large tech company eat whole distributor business,
need cool mind and put our issue on right platform and right country representative,

which can hear our problem and find out right soulution not try to destroyed individual lobby and create corporate lobby which directly get benfit from this processs,
during election season we can put this issue to politcial party to raise voice for ifa,
at present senario not in favour of small business house and retail kirana at present whole busineess shift to big fish and try to eat whole small vendor and individually business,
want to eat,
need sabka vikas sabka saath ,
not for corporate vikas,
jai hind,
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