AMFI is likely to discuss the dividend stripping issue in the forthcoming board meeting to be held on Thursday, said two people familiar with the development.
The CEO of a mid-sized fund house said, “Though this item is not in the agenda, we would discuss it as part of SEBI communication. Also, the board is likely to discuss regarding direct plan feeds to distributors.”
Last week, SEBI had sent an email to fund houses asking if they had resorted to dividend stripping practices. SEBI had reportedly written, “This is reference to the article on dividend stripping attached with this mail wherein it is reported that mutual fund houses are resorting in practice of dividend stripping by informally communicating to investors the record date at least three months in advance to help them carry out tax planning through dividend stripping. You are advised to confirm whether your AMC is resorting to such practices, if any, by 14 January 2016.”
A few media reports suggest that all the AMCs have reverted to SEBI with ‘no’ to this question.
Apart from dividend stripping and direct plan feeds, the board will also discuss whether AMFI’s new commission guidelines have been followed by all AMCs in letter and spirit.
