SEBI has asked AMCs to mention that the commission figures are gross and does not exclude costs incurred by distributors such as service tax, operating expenses, etc.
SEBI has directed AMCs to disclose the actual commission paid to distributors (in absolute terms) against the investor’s total investments in each scheme in the half-yearly consolidated account statements (CAS). 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 SEBI.
SEBI has asked AMCs to mention that the commission figures are gross and does not exclude costs incurred by distributors such as service tax, operating expenses, etc.
“The CAS will also disclose the scheme’s average total expense ratio (in percentage terms) for the half-year period for each scheme’s applicable plan (regular or direct or both) where the concerned investor has actually invested in,” states the circular.
Further, SEBI has said that such half-yearly CAS should 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.
The regulator has also come out with a format for making this disclosure.
The circular comes into effect from October 1.
