AMFI requests SEBI to allow commission disclosure only on investor demand

very first time i see AMFI in fervor of distributor , GOOD

distributors need not be disheartened why investor should not pay service tax as they are paying for shares/insurance premiums /real estate/ gold or even NPS contributions why mutual fund service tax has to be paid by distributors? think and raise your voice

Of late AMCs seems to understand that the IFAs are the cheapest human resource available to carry their brand and business. They neither have the statutory obligation nor have any responsibility as an employer. Still they dictate so much to decide our brokerage.

If the regulators restricts the TER to 1.5%, AMCs hardly left with any amount to disburse as brokerage after taking away their compensation, they feel of their worth.

Unlike AMC executives and staff, as IFAs are otherwise also insurance advisors, they can earn 10 times more by promoting ULIPs as a substitute to MF. By neglecting to hear genuine representation from IFA community, SEBI, AMFI and AMCs are doing dis-service to the growth of the MF industry.

the manufacturer or service providers have a whole sale or reatail chain of dealers all over the country and this is based on a trade pact between the two parties based on contractual agreement of commission depending on demand/location and product acceptance . This is prerogative of promoter of MF whose money is at stake - why Govt. in form of SEBI encroach the domain of free enterprise. If the promoter is able to sell a quity product at higher TER what is the problem- the investor require quality product with quality services and is not bothered about payout done to advisors. In case of insurance the high payouts have been accepted by investor and in FD no investor ask what the co. is paying to broker- even in NPS the investor never bother about commission disclosure hence why MF only requires disclosure and how it could be helpful.

our appeal to promoters of all leading Mutual funds be it be Anil ambani/uday kotak/kumarmangalam Birla/Mistry of tatas/deepak parekh or Kochar to come forward and save the distrbution fraternity from great anguish and humilation heaped on them due to massive regulatory changes. its question of social implications /jobs and when we are talking of SME/startup and self employment the empaneled distributors working for 3 decades since inception of MF is the greatest example of self enterprise and instead of humilating them let the owners of MF show empathy and recognize the huge contributions of IFA"s which has created so much of awareness and taken the indusyty to such great heights- let the experienced distributors be declared brand ambassadors and be included in awareness camps in depts/schools and colleges with the help of AMC and NISM.

service tax for MF idistribution fraternity was in negative list and was considered as bad law. Why Stock brokers are not taxed as the investor pay tax on brokerage. why HDFC and whole lot of triple rated NBFC which pay commission to agents don't ask for any invoice and neither is insurance companies Similarly in real estate the broker who sell flats for commission from developers is not liable for service tax hence this law to tax Mf distributors is hoghly discriminatory / violation of all unoformity in financial instruments and that too on direct charge will open the floodgates to central excise inspector to harass the advisors whose main aim is to penetrate the sale which is herculean job. all of us should wake up and give a straight call EITHER EVERY INSTRUMENT OR NONE - WE WILL NOT ALLOW ARBITRARY /ONE SIDED HARASSMENT OF MF DISTRIBUTORS ALONE. WE TAKE RESOLVE NOT TO BUCKLE AND GO DOWN BEGGING FOR JUSTICE AS THE CAUSE FOR WHICH WE RAISE OUR VOICE IS GENUINE AND TRENDSETTER FOR ALL YOUNG ASPIRANTS WHO WISH TO TAKE THIS JOB AS PROFESSION

Dear Sir


Currently, mutual fund distributors are already giving an annual disclosure to AMFI which states that we are disclosing commissions to investors.

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 or of mis-selling of products? If not, why the need for senseless circulars? And if yes, then why not punish the culprits rather than destroy the whole IFA community. Are these complaints largely directed against a set of distributors like banks whose all employees are given targets to sell without having any knowledge or formal training.

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.

4) 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?

5) 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 such disclosure on mutual fund commissions? Smells of rat.


6) 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?

7) 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 in India. All at the expense of the investors and IFA 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 who have bribed most of the SEBI board officials to come up with new and ridiculous methods to discourage and destroy the IFA channel in India.

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. Checks and controls should be put in place so that no one is intentionally benefitted by regulator acting with malaise.


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 complaints reach the office of the PM and President and they force SEBI to withdraw this circular.
Websites are as below. Convert to PDF online and then attach as PDF online.
pgportal.gov.in- PM office portal
helpline.rb.nic.in - presidents office helpline

It may be good for distributer but not a complete solution.

A large appalause to Sri Chandrashekhar abra

If SEBI doesn't withdraw the unfair order to disclose brokerage paid to distributors in account statements, the IFAs must show physical protests at regional levels, state levels, national level and resort to other forms of protest to the possible levels. Even animals protest when they are attacked. Physical forms of protest to start when all other efforts are in vain.