SEBI’s 16-member Advisory Committee on Mutual Funds met today to discuss a host of issues including commissions.
It is learnt that the market regulator may soon come out with a set of guidelines which will lay out the dos and don’ts on paying upfront and trail commission to distributors.
However, it is unlikely that the regulator may put a blanket ban on upfront commissions, said a source in the know of the development. The rules may apply to both open and closed end funds.
Last week, around 16 MF CEOs met SEBI chairman U K Sinha to give their feedback on upfront commissions. Read here.
SEBI’s recommendations will go to the SEBI board first, which if cleared by the board, will pave the way for a new regime on paying commissions to distributors.
“SEBI
said that it will work out a model and come back to us. It can be a prescriptive
and not a stringent rule as such,” said a SEBI MF Advisory member.
SEBI’s 16-meber MF Advisory Committee met in Mumbai today to discuss a host of issues. Apart from commissions, SEBI may also come out with two new colors to broaden the scope of scheme labelling.
