AMFI Chairman Sundeep Sikka has urged SEBI to request the Finance Ministry to reject the Bose committee recommendations to abolish all trail commission and introduction of free look period in mutual funds, said two people in the know.
Sikka has made this request to SEBI Chief at the Annual General Meeting (AGM) of AMFI held on Tuesday in Mumbai.
Sikka has reportedly said that abolishing trail commission and introduction of the free look period in mutual funds would deter the growth of Indian mutual fund industry. He said that such a move could affect all the three stakeholders of mutual fund industry – investors, distributors and AMCs.
Earlier in November 2014, the Finance Ministry had constituted a nine-member committee to review distribution incentives across financial products, rationalize commission structure and recommend measures to curb mis-selling. The committee, headed by Sumit Bose, former Union Finance Secretary, had submitted the report in August which was made public on September 3, 2015.
Among its key recommendations are doing away with upfront commission and practice of ‘upfronting of commissions’, introduction of reducing AUM based trail commission and leveling commission across T15 and B15 distributors.
SEBI has invited public comments on these recommendations by October 12, 2015. The comments can be sent to paragb@sebi.gove.in and vimalb@sebi.gov.in or by post to Parag Basu at SEBI head office situated at Bandra Kurla Complex in Mumbai.
