MF News SEBI asks AMCs to disclose distributor commissions in half yearly a/c statements

SEBI asks AMCs to disclose distributor commissions in half yearly a/c statements

AMCs will have to publish the actual commission (in absolute terms) paid to distributors in half-year consolidated account statements (CAS) from October 1.

Ravi Samalad Mar 18, 2016

SEBI has asked AMCs to disclose the actual commission paid to distributors in the half-yearly consolidated account statements (CAS) issued to investors. This commission figure will include all direct monetary payments and other payments made in the form of gifts/rewards, trips, event sponsorships etc. by AMCs to distributors, said a SEBI circular issued today.

“The amount of actual commission paid by AMCs to distributors (in absolute terms) during the half-year period against the concerned investor’s total investments in each MF scheme,” states the SEBI circular.

In addition to commissions, AMCs will also have to publish the scheme TER in percentage terms for the half-year period for both direct and regular plans.

“Such half-yearly CAS shall be issued to all MF investors, excluding those investors who do not have any holdings in MF schemes and where no commission against their investment has been paid to distributors, during the concerned half-year period,” stated the SEBI circular.

Further, the CAS will also mention the total purchase value of investment in each scheme.

The circular is effective October 1.

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78 Comments

Krishna · 8 years ago `

I think sebi don't want small distributor or agent have to survive in financial industry.Can sebi tell us in which industry actual price is disclosed on any product.In india there is very few people invest mutual fund.If amc will disclosed Commission in account statement then thay have to pass part of that to the investor which earlier agent use to do.
Ooen your eyes SEBI otherwise small investor will not come to invest in market.

Sameer · 8 years ago `

This is ridiculous. Do anyone ask their client that how much he earns per month from his business ? Do we ask anyone how much commission he earns from his business?
This is simply a foolish step n will encourage kickback demanding once again. Thus ruining the business of MF .

Sameer · 8 years ago `

Dear SEBI, there are many more other things which u have to look upon n make changes for the better. Don't do such unjustified things which in turn ruin small distributors n as a whole can ruin the industry .

dipak gandhi · 8 years ago `

wow---but then why not the same practice for other fin instruments..like insurance and ulip..
and the other side to think is it may encourage pass back..and secondly--i am unable to understand that by this move what purpose shall b accomplished..pl spell out the purpose first..so other alternative can b found..SEBI to spell out motive behind this..

LOKESH NATHANY · 8 years ago `

Clearly the days for real financial planning and advisory are on the way. Sooner we accept better it is for all of us. Hope SEBI also make stringent norms for the advisors and does not leave it to individual certifications of AMFI or IRDA. A comprehensive certification covering all aspects of financial planning and asset class will go a long way. We may say this is premature but at times it is good to be pushed to wall as we work better that way.

Dushyant chaturvedi · 8 years ago `

Agreed but make compulsory to disclose commission in all financial product

amit agarwal · 8 years ago `

The move is against the distributors who are putting their hard efforts to make the client remain invested for long term , this can also induce the churning in the portfolios again

Prithvi · 8 years ago `

It will be very bad impact on distributor community. Only TER has to be disclosed in accout statement or CAS.

supriya jha · 8 years ago `

dear sir,
what is the purpose behind disclosing the half yearly commission and other benefits... to clients.
what is expected from client to go directly and scrap us.... see and predict the long term losses...by taking this step...

Pratik Taksali · 8 years ago `

Excellent step to reduce overall penetrations of MF products for the industry which is still premature. As and when they see good inflow they start making this absurd rules. What purpose does this steps will help other than pass back

sanjay Bhatnagar · 8 years ago `

An absurd decision by SEBI. :/

V KANIKANNAN · 8 years ago `

I think SEBI has no other agenda other than analysing only the MF industry and its brand ambassadors (IFAs) prosperty!!?? Many many big corporates are cheating the investors, share holders and PSBs and whoelse? but no stringent actions. Decision is highly detrimental to the industry.

Y C Kapadia · 8 years ago `

This step will have effect of negative growth of Mutual Fund industry

C R Gopinathan nair · 8 years ago `

Request IFA associations to approach Government. Why this approach is limited to Mutual Fund Distributor commission only. If Govt is also of the opinion that brokerage paid to distributors are to be disclosed in account statements, brokerage/commission paid for other financial services like insurance should also be disclosed. If commission/brokerage paid to financial products are to be disclosed, Profit or commission charged or earned on physical products by manufacturers, distributors and the end retailer also should be disclosed. If salaries of AMC officials above 60 lac p.a. is disclosed, salaries of Directors and officials of all corporate in manufacturing physical products, (above 60 lac) also should be disclosed. Request Govt to have a holistic approach regarding financial products, other intangible products and physical products. Hope all concerned will rise to the occasion.

Prakash · 8 years ago `

SEBI s step will have effect of negative growth of Mutual Fund industry And IFA community

Vinod Choudhary · 8 years ago `

Great step by SEBI. You are trying to open the eyes of investors so that they can understand what is direct investment. But for what interest a distributor will go to investor and tell him see this is mutual fund a better investment product.Literally you are saying distributors are the culprits. They have no right to earn their livelihood. We want to be the RIA but how can we forget our trail that we have built up in years. Please provide some solution do not portrait us as culprits

Maninder Chadha · 8 years ago `

Shame and ridiculous , meant to finish the Mf industry .

Raju · 8 years ago `

I m speech less.

Viral Shah · 8 years ago `

Sebi is taking rediculous steps.. I think they just wanted to kill the industry... Slowly we just wanted to come out of pass back.. It will again lead to same path... U have reduced brokerages, u have introduce direct plan, u have introduce service tax on commission, and now disclosure..
It is very much true SEBI needs to clarify the purpose of such steps...

girish tiwari · 8 years ago `

it is wrong let them to do.this is started by mr bhave long back .they want only corporate distributers so ifa are to be filtered .be ready for more restrictions.

Kunal · 8 years ago `

SEBI is trying it's best to throw IFAs out from this Industy.
First they Tried it by Banning entry loads, then came Direct Plans, and now it's disclosure of agents commission on Statement.
Why SEBI is not insisting upon disclosing the out performance of the sheme over its benchmark in Investment Statement or disclosing CAGR returns generated by scheme.
Why IFAs are targeted as villains of Financial Services Industry.
In my opinion this move is disastrous and will result in many IFAs either leaving the Industry or will start taking up this profession only as part time from full time.

laxmi Narain Modi · 8 years ago `

I Am unable to understand that SEBI wants to improve Mutual Funds for new investors or to cut a plant which are trying to become a tree. We IFA watering such a plant and waiting that we will get fruits in future,when it become a tree, then why SEBI are using an axe. I request SEBI to get back its step because its easy to pass an order ,but for an IFA its too hard to reply their investor on this matter.

Kanti Vaghela · 8 years ago `

All IFA should stop business and force Amc to urge sebi that this step is ruin the industry. Because IFA go no one will listen but Amc go then it must listen and solution in favour of IFA

kirit shah · 8 years ago `

Sebi like police on traffic side wants to show presence and not help and regularise other industries like insurance and advisory and agency related work where a person is helping the community and investor so that they just donot get trapped

anoymous · 8 years ago `

Why doesnt sebiissue circular to stop regular plans. Instead of giving slow poison to ifa fraternity by such events as commission disclosure it has no right to cut the growth . sebi chairman must disclose his salary to all amc ......

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