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Just like mutual funds and PMS, AIFs will also offer direct plans of their schemes.
In a circular, SEBI has asked AIFs to launch direct plan of their schemes to give an option to invest in their scheme without paying any distribution of placement fees.
SEBI further clarified that RIAs can sell this option to their fee based clients.
SEBI said, “Schemes of AIFs shall have an option of ‘Direct Plan’ for investors. Such direct plan shall not entail any distribution fee/ placement fee. AIFs shall ensure that investors who approach the AIF through a SEBI registered intermediary which is separately charging the investor any fee (such as advisory fee or portfolio management fee), are on-boarded via direct plan only.”
The market regulator believes that the move will provide flexibility to investors, bring transparency in expenses and curb mis-selling of AIFs.
AIFs will have to launch direct plans by May 1, 2023.
