Registrars are tweaking their software to incorporate the new rule even as AMCs await more clarity on implementation from AMFI
Mumbai: It is believed that the transaction fee will not be implemented with effect from August 22, as specified in the SEBI circular as registrars and AMCs are still working out the modalities of implementing this. A compliance officer of a leading AMC tells us that the implementation of transaction charges may take 15 to 30 days.
One of the major challenges the industry faces is de-duplication of folios. Currently, no entity possesses a centralized database of mutual fund investors. Each registrar has the details of the investors of the fund houses serviced by them. CAMS and Karvy are the two main registrars who handle the bulk of the industry volumes.
“We have been working out the operational modalities ever since SEBI announced its intention to allow the transaction charges in their Press Release. Many issues have been sorted out and we are working closely with AMFI on the remaining issues,” said Mr. N.K. Prasad, CEO, CAMS.
Now application processing will entail a few more steps. “Firstly, we will ask for a self declaration from investors. We will then cross check the details of investors with CVL whether the KYC is done. We will wait for some more clarity from AMFI and SEBI and issue addendum to inform the advisors and investors on the Rs 100/150 transaction fee for all their schemes,” said a sales head of a large fund house.
The circular is applicable to all types of schemes – equity, debt and will cover both current NFOs and NFOs which are in the pipeline.
Fund officials are of the view that Rs. 150 will be paid to distributor if the investor is new to a fund house. Sources tell us that fund houses will also consult their auditors and AMFI to check if any taxes have to be deducted from the transaction fee.
