MF News MFDs will not get lower commission if they switch to NFOs from liquid funds/overnight funds: SEBI

MFDs will not get lower commission if they switch to NFOs from liquid funds/overnight funds: SEBI

From April 1, 2025, SEBI instructed AMCs to offer lower commission of the two schemes if investors switch from existing schemes to NFOs.

Nishant Patnaik May 18, 2025

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Switching from liquid funds/overnight funds to NFOs within the same AMC will not lower your trail commission.

SEBI has modified with the regulations in which it instructed fund houses to offer lower commission if MFDs switches from one scheme to an NFO of a regular plan within the same fund house. This included liquid funds and overnight funds as well.

However, SEBI has modified its guidelines and exempted switch transactions from liquid funds and overnight funds to NFO of the same. Also, MFDs need to ensure that no switch transaction occurred in liquid funds or overnight funds for the preceding 30 days.

In a letter sent to fund houses, AMFI said, SEBI advised that the requirement of lower commission shall not be applicable for switch transactions where the source scheme is liquid fund or overnight fund subject to the requirement that investments in such liquid fund or overnight fund have not been made though switch transaction from other scheme within the preceding 30 days.

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1 Comment

Bhupendra Naik · 2 weeks ago `

There is always if and but' in every regulation. Why does regulation start with an assumption that everything happening around always has an ill-intention. Why only Liquid/Overnight and why not Low, Ultra Short and why the 30-day no switch into Liquid/Overnight.

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