AMFI has directed all AMCs to abide by its new commission guidelines in spirit from 1st January. AMFI has issued this diktat to AMCs in its board meeting held in Mumbai today.
SEBI chief U K Sinha recently said that the regulator will intervene if AMFI does not come to a consensus on this issue. MF (distributor) commission should come down. We have given them (AMCs) a long rope and we are within our rights to tell them," said U K Sinha at the CII Corporate Governance Summit held in Mumbai recently.
In fact, SEBI had shot off a letter to fund houses to see if they are complying with AMFI’s new commission guidelines.
SEBI has reportedly written, “AMFI has issued two best practices guidelines on rationalization of commission. We have informally heard that a few AMCs are not following this in spirit. You are advised to provide your status on compliance with the new commission guidelines by 3 pm on Thursday.” Last month, AMFI had approached SEBI to seek its recommendations to ensure compliance of best practices circular on commission among all its members.
After AMFI capped the upfront commission at 1%, a few AMCs said that they will not adhere to the new guidelines on commission.
