SEBI had asked AMCs to conduct due-diligence for IFAs with excessive portfolio turnover.
According to industry sources, AMCs are planning to temporarily suspend commissions of 38 distributors who have not co-operated with AMCs to conduct due-diligence. According to SEBI’s new guideline, AMCs shall conduct additional due-diligence of such distributors who have an excessive portfolio turnover ratio, i.e. more than two times the industry average.
The industry is also contemplating the implementation of various new guidelines recently announced by SEBI. According to the recent circular, a new cadre of distributors, such as postal agents, retired government and semi-government officials (class III and above or equivalent) with a service of at least 10 years, retired teachers with a service of at least 10 years, retired bank officers with a service of at least 10 years, and other similar persons (such as Bank correspondents) as may be notified by AMFI/AMC from time to time, to sell units of simple and performing mutual fund schemes.
In
this context, AMCs are trying to
introduce an easy format of examination for these set of distributors to be
eligible to sell performing mutual funds.
