SEBI has declined Paytm Money’s request in which the direct plan platform has sought guidance on whether the company can seek reimbursement from AMCs for incurring costs on doing KYC, technology hosting, maintaining platform etc.
Earlier, Paytm Money requested SEBI to allow them to get reimbursement from AMCs for distributing direct plans of mutual funds. The RIA argued that AMCs are any which way incurring these costs if investments are routed through them.
In a request letter sent to SEBI, Paytm Money said, “Currently, Paytm Money does not charge advisory or execution fees, and intends to avail of reimbursement of the service related out-of-pocket expenses such as KYC, PG, technology hosting, platform maintenance etc. from AMCs whose direct plans they are selling, as Paytm Money is bearing the cost that the AMC would have borne in case the investments were directly routed through them.”
In reply, the market regulator said that RIAs cannot avail reimbursement from AMCs. SEBI said, “Paytm Money cannot avail reimbursement of any amount for the services given to its clients from the AMCs whose direct plans are being sold by them to clients.”
The RIA has also sought SEBI’s guidance on issuance of electronic contract to clients. However, SEBI said that merely seeking an electronic consent and sharing it with clients on their registered email id may not be considered as sufficient compliance with IA Regulations.
