SEBI has allowed the new cadre of distributors to sell Mutual Fund Linked Retirement Plans (MFLRPs) and liquid funds. This has come into effect immediately.
So far, the new cadre of distributors were allowed to canvass diversified equity funds, index funds and FMPs having track record which equals to or is better than their benchmark for at least three years.
In a circular issued today, SEBI has said, “New cadre of distributors were allowed to sell simple and performing mutual fund products. It has been decided that simple and performing mutual fund schemes shall also comprise of retirement benefit schemes having tax benefits and liquid schemes/ money market mutual fund schemes.”
This was a long pending demand of the mutual fund industry.
C. VR. Rajendran, CEO, AMFI said, “The contribution of new cadre of distributors in the AUM of the MF industry is not encouraging. Since these distributors are generally retired PSU officials and may be getting decent retirement benefits for livelihood, they are not taking mutual fund distribution seriously. However, this is a welcome move. This will add to their offerings.”
Earlier in 2012, SEBI had identified postal agents, retired government and semi-government officials, retired teachers and bank officers, bank correspondents as new cadre to sell mutual funds. These new cadre of distributors require a simplified NISM certification and AMFI registration.
According to industry sources, there are about 340 active new cadre of distributors in the industry.
