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SEBI’s proposal on reintroduction of B30 incentives will take some more time.
An AMFI board member requesting anonymity told Cafemutual that there is no development on the B30 incentives since the market regulator has called back its new proposals on TER structure. “While the TER regulations will take some more time as it requires further deliberation, we expect the regulator to give us go ahead on at least reintroduction of B30 incentives to distributors.”
Another official told Cafemutual that SEBI wants fund houses to take the onus of misconduct of the proposed B30 regulations by their distributors. “The market regulator wants us to facilitate a mechanism which does not leave any scope of misuse of the proposed B30 norms. However, fund houses are yet to find out solution to this and they don’t want to take this responsibility either.”
Earlier in May, SEBI proposed the introduction of a new incentive structure for MFDs for bringing in new investors from B30 cities and women investors irrespective of their location based on their PAN.
According to the proposals, AMCs should pay a flat fee of 1% of the size of the first application amount or the amount of SIP committed subject to a maximum incentive of Rs.2000. Such a structure will be applicable for bringing in new investors from B30 cities or women investors irrespective of their location. However, both cannot be applicable simultaneously, said SEBI.
Further, this additional incentive structure is subject to claw back if such an investor redeems money within a year’s time. This onetime fee will come from IAP corpus of 1% that stays with AMCs to create awareness among people.
Another proposal was allowing AMCs to consider paying a higher percentage of commission for inflows from B30 cities compared to commission for inflows from T30 cities.
