The mutual fund industry has ended the logjam on AMFI’s new commission guidelines. After SEBI Chief U. K. Sinha’s strict warning, all AMCs have started following a uniform commission structure from 1st January.
C.V.R. Rajendran, CEO, AMFI has confirmed this development.
SEBI chief U. K. Sinha had recently warned that the regulator would intervene if AMFI did 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," Sinha had said at the CII Corporate Governance Summit held in Mumbai recently.
AMFI, in its board meeting held in December 2015, had directed all AMCs to abide by its new commission guidelines in spirit from 1st January.
SEBI had to intervene in this matter as a few AMCs were not adhering to AMFI’s best practices circular on new commission payouts. H. N. Sinor who was the then CEO of AMFI had told Cafemutual that 35 fund houses were adhering to the new commission guidelines. A few fund houses including Sundaram, JP Morgan, HSBC and Baroda Pioneer were reportedly not adhering to AMFI’s best practices guidelines.
In fact, SEBI had shot off a letter to fund houses to find out if they were complying with AMFI’s new commission guidelines. SEBI had 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.”
Earlier, AMFI had approached SEBI to seek its recommendations to ensure compliance of best practices circular on commission among all its members.
