MF News IFAs protest SEBI’s move on commission disclosure

IFAs protest SEBI’s move on commission disclosure

Mahesh Sharma, Minister of State for Tourism, Culture and Civil Aviation has assured Varanasi IFAs that he will fix a meeting with Jayant Sinha, Minister of State for Finance to flag their concerns over SEBI’s commission disclosure rule.

Nishant Patnaik Apr 4, 2016

The discontent over SEBI’s rule to disclose the commissions of distributors in a/c statements intensified with a few distributor associations observing no login day on April 4 i.e. not accepting any investment requests.

Members of Kanpur based Association of Mutual Fund Financial Advisory (AMFFA) observed ‘no login day’ on April 4. Alok Khanna, Member, AMFFA said that over 100 IFAs in Kanpur and adjoining districts did not accept any application forms for investments to protest against SEBI’s move.

While a few IFA associations submitted their resentment letters to AMCs against the SEBI move, members of Mutual Fund Distributor Association of Varanasi (MFDAV) visited Prime Minister Narendra Modi’s Varanasi Office and met Minister of State for Tourism, Culture and Civil Aviation Mahesh Sharma. MFDAV members handed over a letter to the Minister and apprised him about the repercussions of the move.

Rajiv Shah, Secretary, MFDAV told Cafemutual that the Minister gave a patient hearing to them and assured them of arranging a meeting with Jayant Sinha, Minister of State for Finance.

Meanwhile, members of Nasik based Guntavanuk Prathinidhi Vikas Sanstha, (GPVS) have launched a non-cooperation movement in which they have decided not to meet with any AMC official and attend any meeting or event organized by AMCs till this issue is resolved. The members handed over a resentment letter to the branch managers of various fund houses today. Ajay Kale, President, GPVS said that the members of his association have handed over resentment letters to 17 AMCs.

Many distributors have vehemently opposed SEBI’s move on commission disclosure as they believe that this rule will be regressive and induce pass back practice by investors.

It remains to be seen if SEBI reconsiders its decision.

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63 Comments

paresh · 8 years ago `

Don't know Commission disclosures are justified or not.But it has really become an unsecured business if any one is doing full time and focusing only on mutual funds.

Distributors working for decades can survive some how but what about new comers.
Why one should enter into business where commission received will be subject to risk of claw-backs,subject to.risk of any time redemption,subject to risk of direct plans,subject to risk of investors uncle passing amfi test..so many risks.

Ranjan D Gupta · 8 years ago

How can SEBI ask or order to disclose one's commission income?. Is it not unethical and SEBI has forgotten that these IFAs has erected the plinth of Mutual Fund industry and still constructing the building. How SEBI can become so disrespectful to this community. Does it want that all IFAs will be RIA and fill the SEBI's coffer with hefty fees for registration and ultimately will die because of inadequate income. SEBI should know that Investors in India are not that matured as other countries who can offer fees to Distributors or RIAs . Why this discrimination when other wings of financial market is not disclosing the commission structure like Insurance, Post office, Banks then why it is for IFAs??. For investors interest SEBI has already open a route of investment i,e Direct investment. I am really surprised.

Rahul · 8 years ago `

How can you ask some one to disclose his income. Is it ethical? By disclosing the commission in the statement, possibility of pass back shall be started. It is not right. Sebi must have views from distributors before taking decision.

nagaraju · 8 years ago `

Investor allready know the expence ratio, we are getting commission from that only,

Raju · 8 years ago `

Full nonsense.
Only distributor facing all problem starting from application pick up to scheme not performed well.
Investors know us only.

All associates like sponsor, trustee, AMC, regulator enjoy from our business.

If u want to disclose then disclose all expance where go include sponser earnings , AMC charge, fund manager charge, registar charge, sebi- amfi change if any.

Why only distributor discloser.

Rajesh Sharma · 8 years ago `

Must congratulate the IFAs of Varanasi, Kanpur, Vadodara & Nasik.... Guys don't be "SharmaG" of "Bhabhi Ji Ghar..." who says "I like it" after every slap... Guys please start reacting, so that your voice would be heard clear & loud.

sumit Aggarwal · 8 years ago

well said

pavan kumar jaggi · 8 years ago `

statement me commission disclose karne se investor or distributors ke relation me problems aaye gi or es se pass back ka chalan dubara shuru ho ga or kisi ki income ko disclose karne ka right kisi ko nahi hai agar sebi ko lagta hai ki woh or jyada pardarshita dikana chah rahi hai to Direct ka option to woh pahle se hi de rahi hai jis bhi investor ko services nahi leni hai woh Direct kare na

Dhirendra Kumar Srivastava · 8 years ago `

Dear friends this is high time to react & protect to this unusual SEBI decision to disclosures of commission on statement will notl just not a disclosure

Dhirendra Kumar Srivastava · 8 years ago `

Dear friends this is high time to react & protests to this unusual SEBI decision of disclosures of commission on statement.it will not just a disclosure it will missguide investors whether he should take advice from an advisor or go direct or not give any value to advisor's services who has cleared AMFFI Exam with his knowledge and as per AMFFI Guidelines only AMFFI Registered ARN holders can advice, we have to follow all rules & regulations,we can not earn commission on ourselves investment in our ARN code so many things to say.but now we all IFA community will not tolerate this ridiculous decision.
Today AMFFA ( Kanpur IFA association) has declared no login day with support of all members further we will strongly oppose this with support of all India level.

Malay shah · 8 years ago

I truly agree with dhirendra.
Our MF distributor lobby should get united and protest against sebi new ammenment of commission disclosure. It's unethical to show some ones income to others.
Also we should have no login day all over India for at least a week , were our protest against sebi could be seen...its really high time. If small base like Kanpur can protest, than we at Mumbai and pan India can do same thing. Why only MF distributor / advisor has to suffer.
Let's be one and fight .

ravi vishwakarma · 8 years ago `

Sebi should provide a fare business enviorement to Mutual Fund Industry rather then discouraging the IFA. They were the savior of this industry at the time of reasation, they the teacher of investing to the investors in India. So they should be respected not rejected by the SEBI moves.

B BALAJE.M.A.(LL.B) · 8 years ago `

SEBI and AMFI reconsider this diclose statement.It will induce passback commission to investor and
may spoil IFA community

roopkishore · 8 years ago

very big trouble for IFA.

Sukanta Bhattacharjee · 8 years ago `

This is the time to raised our voice against SEBI decision. Not only by giving comments. We IFA of ASANSOL and Burdwan protest and called zero business day

Sukanta Bhattacharjee · 8 years ago `

This is the time to raised our voice against SEBI decision. Not only by giving comments. We IFA of ASANSOL and Burdwan protest and called zero business day

Sukanta Bhattacharjee · 8 years ago `

This is the time to raised our voice against SEBI decision. Not only by giving comments. We IFA of ASANSOL and Burdwan protest and called zero business day

Ajit Singh · 8 years ago `

Most biased diktat by SEBI veiled in the name of investor protection.

SANTANU GUHA · 8 years ago `

SEBI hath dhoke advisoron ke piche padgaya hei.Pata nehi kyon.Most probably a section in the SEBI is jealous of the Advisor community.SEBI should also declare the salaries of its employees including the Chairman.

Ramakant Gupta · 8 years ago `

This disclosure of Income will surely create the culture of Commission pass back to investor, it will create the work culture of MF Distributors very bad. Does SEBI want to spoil the Industry or SEBI want to promote the industry.

DEEPAK SINGLA · 8 years ago `

SEBI is a organisation to protect the interests of investors and AMFI is for the vested interests of AMCs. There is no representation of IFAs in SEBI or AMFI. There is nobody to take care the interest of IFAs. Whether it is the matter of Service Tax or Ban of Entry Load or capping of Commission of IFAs or implementation of Direct Plans, there is no association or Legal body to protect the interest of IFAs. So every decision of SEBI or AMFI is done without any consideration of IFAs. Please have some representation of IFAs in SEBI and AMFI to have judicial decision making, protecting the interest of Investors as well IFAs.

Shamsad idrisi · 8 years ago `

Dear sebi ke thekedar,
Or client ke hit me chahnewale

U all are very true . That agent commission must know by the client. But who will be benefitted by this act.please think twice.
Still in india peaple are not awake about equity product . 72 sawalo ke Jawab dene ke baad 1 application aati . Aap thekedaro ko ye baat kyu nahi Samaj me aa Rahi hai.
We have to take lots of efffrott to bring the application .
In this activity only client will loose .because he / she may think mera x amount agent ko Jara hai. Iske Wajah Se product lene me delay karega.

Pls think

Rajesh kumar · 8 years ago `

It's ridiculous have u seen in any business there 's any law to tell his customers what I have earned from u in so many years. When we r giving service tax income tax and also claw back tax also competition from direct ,from banks from insurance post office agents then pongi CO agents.everything on mutual funds ifa

Ganesh H R · 8 years ago `

We disclose our income to income tax authority and we pay tax for that, it's a hard earned money.why we should disclose to the public,

Maninder chadha · 8 years ago `

Shame on the part of sebi along with big AMC + e commerce companies * AMFI who are bent upon finishing our business . They should remember without us they can't survive .
It's out hard earned and tax paid money . Mr Sinha should focus on other corrupt issues going in the markets rather than taming us .
One of the most senseless decision ever taken by sebi .
Shame

BARUN CHANDRA dUTTA · 8 years ago `

Distributor sales the m/f product to there customer verious risk zone and get commission ,if the commission clawbeck for verious reasson that very harmfull

SANJAY KUMAR SOTA · 8 years ago `

SEBI & AMFI without taking into cforeration the consequences of their decision just jump on the imposition of baseless & unethical rulings/policies. Be it promoting DIRECT PLAN, imposing service tax on distributors or to top it all disclosure of commission of distributor on SOA. The authorities in chair are behaving very indifferently with DISTRIBUTOR fraternity. Is it any way ethical 1) to disclose someone's income to everyone, 2) to levy service tax on distributors. All this will lead to a big chaos and confusion and a sense of disbelief in client/distributor, AMC/distributor relationship. I would request ministry of finance & PMO to intervene save the distributors from WHIP of SEBI

G kALIVARADAN · 8 years ago `

Any of either SEBI authority or working personnel will render service without salary. In reality we do have meager income in the name of commission. When they do service at free we do not want this very low commission.
Already in most cases for customers we do service such as redemption, switch over, address change, KYC verification certificate etc. with our arrangement for application and forwarding such request to either fund house or to the transfer agent at free of cost. If this situation continues no penetration of MF further and the existing investors certainly will leave the mutual fund industry. Fund houses must have their own office each nook and corner.

R. Vasagan Arasu · 8 years ago `

It will neither benefit the investor nor the Industry, because all the investors a so well inmeformed about the portfolios and even if they are direct investors they still come to us for our views on the investments done over a period of time and ask us to help them to restructure their portfolios.

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