MF News Supreme Court puts stay on transfer of distributors’ commission to investors

Supreme Court puts stay on transfer of distributors’ commission to investors

SBI MF cannot make any further disbursals for the time being as MFD association FIFA seeks court’s order to stop transfer of distributor commission to investors.

Team Cafemutual Apr 18, 2022

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The Supreme Court has restrained SBI Mutual Fund from making the next tranche of payment to investors of Franklin Templeton MF until further orders.

The Supreme Court issued the directive while hearing a petition filed by Foundation of Independent Financial Advisors (FIFA) seeking payment of distributor commissions.

FIFA approached the Supreme Court after Franklin Templeton MF transferred distributor commissions accrued in the six suspended debt schemes to SBI MF for disbursal to investors, said a source.

The commission, accrued between April 24 and March 17, amounted to Rs. 78 crore and was transferred for payment to investors on SEBI's directive.

FIFA wants this commission to go to distributors.

SBI MF was set to disburse payment of around Rs. 530 crore to investors soon. However, the payments will now remain on hold due to the court order.

So far, SBI MF has disbursed around Rs. 26,098 crore to unitholders of the six suspended debt schemes. Last year, the Supreme Court appointed SBI MF to oversee the winding up of the six schemes and transfer the funds to investors.

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4 Comments

Vikash Kumar · 2 years ago `

Nice

Prashant · 2 years ago `

Sorry but this is not correct. Why should investors suffer because of the brokerage issue? The court should have allowed to distribute the tranche to investors and collected money from Franklin. In this entire episode the losers are investors and distributors and only beneficiary is Franklin( the one who is an actual culprit is spared by regulator, government and now court too). This is absurd. FIFA has gone to court with wrong case. The case should have been against Franklin and the subject should have been they have to shell out the money from their pocket and given it to distributors immediately after winding up. Also Franklin should give back entire TER they have charged back to the investors and paid brokerage from their own pockets. If punishment is not instant and not strict than others will follow Franklin's steps knowing that nothing will happen to them if they do anything wrong.

sunil s bhagat · 2 years ago

AS SEBI had ordered SBI to distribute the unpaid distributors commissions to the investors along with the other payment FIFA was left with no other option but to halt the entire tranche of the payment

sunil s bhagat · 2 years ago `

The order by SEBI was to distribute the mf commissions due to the distributors along with the balance amount due on the funds under winding up to the investors. The distributor would lose their hard earned monies had FIFA not put in this case to the Supreme Court. FIFA is doing a wonderful job on behalf of the distributor cmmunity..

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