AMCs may get higher expense ratio; distributor incentives also discussed
C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council met representatives from mutual fund and banking industry yesterday to get their feedback on the ways to revive economic activity in the country.
Mutual fund industry was represented by the Milind Barve, Managing Director, HDFC Mutual Fund and CEOs of top two fund houses. According to the officials present in the meeting, fund houses and SEBI are trying to figure out ways to incentivise the distributors as it is in the immediate list of issues to be resolved by the Government. Entry Load won’t be re-introduced in the industry but other remuneration modes with safeguards against churning might be introduced in the industry.
“It is not easy to decide on other remuneration mode to boost the distribution channel. Earlier the regulator banned entry load to stop churning but the issue still persists. It could take some time for us to decide on a universal remunerating medium,” said a senior official familiar with the development.
SEBI might soon allow AMCs a higher expense ratio which it can utilise for increasing their distribution budgets.
Bankers in the meeting discussed various government policies that were constraining many sectors leading to a rise in their non-performing loans, said various media reports.
