SEBI to hold discussions with MF Advisory Committee members before arriving at any decision on distributors commissions.
SEBI
has not finalized a framework for mutual fund commissions yet, said SEBI
Chairman U K Sinha. Sinha was speaking to reporters on the sidelines of the launch
of MF Utility system.
Before arriving at any decision on commissions, he said that SEBI will call for a meeting of SEBI MF Advisory members to discuss the issue in detail.
“We have been emphasizing to both AMCs and distributors that they have to try extremely hard to reach out to investors in a consistent manner. In reaching out to investors, they have to ensure that the product is not very costly. As I speak to you, we have not taken any decision on mutual fund commissions yet. However, we had an interaction with the industry recently and we are also going to call a meeting of SEBI MF Advisory Committee to discuss the pros and cons. For example, is it true that some AMCs are following practices which are in violation of SEBI regulations? We will look into these issues. So far, we have not come across any such instances, said U K Sinha when asked about SEBI’s decision on MF commissions.
SEBI
chief had met MF Advisory committee members last month to discuss a host of issues, including commissions. It is believed that that SEBI may not do away
with upfront commissions completely. However, it may bring down the difference
between upfront and trail commissions, said a senior fund official.
