A longstanding demand of distributors to get feeds of direct plan has finally been met. AMFI has sent a letter to fund houses today communicating SEBI’s approval on providing feeds of direct plans to both distributors and RIAs, confirmed three fund officials.
However, SEBI has asked fund houses to take prior approval of investors before sharing it with the intermediaries. Investors will require to give their consent in a standard format which is being worked out by AMFI.
Also, SEBI has asked fund houses to issue a periodic declaration authorized by the trustees of AMCs that no consideration or brokerages are being paid to distributors or RIAs for such a service.
Earlier, AMFI had requested SEBI to allow fund houses to provide direct plan feeds to the distributors and RIAs.
It may be recalled that with the introduction of the direct plan, the distributor has been cut out. It was argued that tagging would enable the advisor to get access to client records for the investments recommended by him/her so that they could monitor their client portfolios. In other words, distributors wanted their ARNs to be tagged in direct applications so that they could get the feeds of schemes they recommend to their clients.
