IFAs protest SEBI’s move on commission disclosure

IF distributor commission is disclosed to make investor more informed & transparent about investment , why not medical shop, petrol pumps, and Kirana wala show their commission on bills, because these thing are much more important in the life over investing in mutual funds.

This is totally disgraceful move of SEBI . 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.

AMC and AMFI feel that IFA is not a part of AMC.AMC also feels that IFA is a outsider of AMC, that's why they are not protest against this SEBI regulation. This unethical regulation is destroyed investor and IFA relationship. Why not RM and other employee are disclosed there insentive in the statement.Why only IFA commission is disclose.why not AMC disclosed there income from that business in the statement.... Why why why....I ask ..
..Any SEBI person can asnwer .....I am waiting sir.

From this rule it's clier that SEBI want to kill the IFA and investor suffer to miss selling and cheating by companies. Cruss the tree in growing stage.

Dear Sir

It is to bring to your notice about ridiculous, maligned and one sided circular being issued by market regulator SEBI to disclose mutual fund distributor’s commission in client statements going forward.

Currently, mutual fund distributors are already giving an annual disclosure to AMFI which states that we are disclosing commissions to investors. Also, AMCs disclose the commissions paid to the top 400 distributors on their websites. AMFI also publishes the aggregate commissions earned by these distributors across all AMCs.

Despite AMFI’s (industry and AMC body) plea to not go ahead with commission disclosure rule in account statements, SEBI has instructed AMCs to disclose commissions in half-yearly account statements.

The following points have come up for notice and review after this circular being passed:

1) Has SEBI received complaints from customers in regard of non-disclosure of commissions by distributors? If not, why the need for senseless circulars? And if yes, then why not punish the culprits rather than destroy the whole IFA community.

2) Giving too much information to investors will only confuse them and resist them to take up services of MF distributors wherein they are guided and educated by our community to invest in mutual funds, provide consultancy services of picking up right funds depending on clients investment portfolio, past experience, income profile, life stage, risk profile, investment horizon, doing portfolio review and rebalancing, guiding the client in difficult times etc. Does SEBI think that such services are free in nature and IFA as a community should not be there in the first place? Let them reply in plain terms if distributors are required or not in the industry.

3) The move will be inducing pass back culture which only established distributors and big banks can afford. No more new distributors to join the industry. What happened to the idea of Skill India? What happened to idea of self sustainable employment generation for educated youth in India? Are we happy with less than 10000 active distributors in a country of more than 125 crore people? How does SEBI encourage new and professionally educated persons to join the industry?

4) Why doesn’t SEBI make it mandatory to disclose commissions across products like structured products, PMS (upto 4-6%), private equity (up to 4-6%), insurance plans (up to 50%) and NCDs (up to 6%) to disclose their commissions? Only mutual funds have been wealth creators among these ridiculously expensive products. All other products have proven to be wealth destructors. Why the regulators are biased against the Mutual Funds distributors only. Also, all industry depends on commissions to selling agents, even a bottle of shampoo sold in India, commissions are paid to distributors and retailers. Do they disclose their commissions in the bill provided to clients. Then why on mutual fund commissions? Smells of rat.


5) There is already a provision of Direct Mutual Funds Plans in all categories for educated and well heeled investors who have high financial literacy and do not wish to take services of a distributor. Also, distributor’s income and commissions are capped through various provisions including maximum expense ratio of fund, capping on upfront commission etc. Then what is the purpose of such a disclosure to investors who have been educated and served over the years by distributors. Does the regulator considers distributors to be only taking up the service of educating and bringing new clients to the industry only to be grabbed up by direct plans lure in future. How does the regulator ensure continued income to distributors for their efforts to educate and bring the clients to the mutual fund industry?

6) The angle of corruption in SEBI board and officials is to be also checked. Its highly likely that the SEBI board, officials and chairman are bribed by big banks and AMC’s who want to get rid of the distributors which are their direct competition. That way they will start enjoying monopoly in mutual fund distribution. All at the expense of the investors and distributor community. Assets and liabilities of all SEBI officials, board members and chairman should be scrutinized by IB and concerned authorities.

SEBI as an industry regulator is acting with malaise and partiality against the distributor community on the behest of the large corporate distributors and banks.

We request you sir to look into the issue seriously and have all angles of SEBI circular being checked. We demand that this SEBI circular on commission disclosure be rolled back asap and no one should be allowed to destroy a budding industry and take away hard earned income of hard working people of India and also not to create disruptions in the market place in the name of investor protection.



I have written the above letter to the Prime Minister and President of India online grievance mechanism. All IFA can copy / change language as they deem fit and proper and write to the PM and President.
10 mins task. Pls do not hesitate. Let 1000 compliants reach the office of the PM and President and they force SEBI to withdraw this circular.
pgportal.gov.in- PM portal
helpline.rb.nic.in - presidents office helpline

If 1000 messages are received, government will be forced to listen to us.

Sir,
Commission disclosing should happen but there should be persent commission. As if there will be direct investment then also the investors will need our help to direct them for the right advice.
So this scheme should be finalized viewing IFAs interest and thier basic needs.

Sir,
Commission disclosing should happen but there should be persent commission. As if there will be direct investment then also the investors will need our help to direct them for the right advice.
So this scheme should be finalized viewing IFAs interest and thier basic needs.