AMCs want the commission structure to be tweaked.
After facing resistance from distributors and fund houses, AMFI is likely to review the recently introduced commission structure, said two CEOs in the know of the development.
The industry body is likely to hold an extra ordinary general meeting (EGM) soon which will be attended by all fund houses.
“The commission structure introduced by AMFI is not acceptable to all. There will be a meeting to review it,” said the CEO on the condition of anonymity.
“There is an EGM but no date has been fixed yet. AMFI will invite the views of all AMCs in this meeting,” said the CEO of a bank sponsored AMC.
AMFI has capped upfront commission at 1% and given freedom to AMCs to decide the trail commission on their own, though with some caveats. The commission has to be paid on distributable TER, which is gross TER minus operating expense. The trail has to be on a perpetual basis. This means that trail commission will be unchanged in all subsequent years. In the new commission structure, AMCs can choose not to pay any upfront and adopt full trail model.
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