AMFI in its board meeting held on Tuesday has decided to
keep the existing trail commission guidelines unchanged
Mumbai: The move comes after a leading online distributor proposed to
AMFI that trail commission be given to it if existing distributors shift their
partial or full client base to its platform.
“We don’t agree with that. The rule will remain the same,” says H N
Sinor, CEO, AMFI.
AMFI has also decided that the trail commission will not go to new
distributor if the existing distributor voluntarily opts out of business. The
unused trail would continue to be used for investor education activities as per
SEBI’s mandate.
AMFI’s decision to stop trail commission to both distributors in the
event of ARN code change has drawn mixed reactions from the industry. Some felt
that logically the trail should be passed on to the new distributor if the case
for a change is genuine and is initiated by clients on account of improper
services or advice given by existing distributor. Others agree with AMFI’s
decision considering the fact that there were a lot of unfair asset transfers
among distributors to grab trail commission.
Cafemutual had yesterday reported that AMFI is likely to take a decision on trail commission. Read here: AMFI may tweak trail commission rule
Are you in sync with AMFI board’s decision? Do let us know.
