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In an effort to curb instances of churning and check mis-selling, RTAs have reportedly started tracking MF transactions where purchase and redemption happen frequently.
This practice has started from March 1, 2023 when AMFI temporarily suspended B30 incentives of distributors after SEBI’s direction.
Both CAMS and Kfintech reportedly submit a report to AMCs on folios where purchase and redemption happen within five working days or a week’s time.
In fact, two fund houses have stopped payment of B30 incentives of such distributors on assets built before suspension of B30 incentives i.e. assets built before February 28, 2023, said one of the RTA officials requesting anonymity.
“While we have been doing it for quite some time, this time we have deployed stringent systems and processes to track such an activity,” said another RTA official.
On B30 incentives, both officials said that they have been awaiting clarity from SEBI and AMFI to develop a mechanism to track unethical business practices.
Last week, an MF official told Cafemutual that AMFI has sought SEBI’s intervention on this matter as the industry is yet to come out with a mechanism to curb mis-use of B30 incentives by AMCs and MFDs.
