The tussle to discontinue upfront commission and switch over to the trail model has revived hopes of forming a self-regulatory organisation under United Forum, an umbrella body of about six mutual fund distributor associations.
SEBI’s attempts in the last three years to form an SRO for distributors had failed, as it could not get the scattered independent financial advisors on one platform. However, implementation of trail-based commission by the Association of Mutual Funds in India without any regulatory powers has put distributors in a quandary. This apart, the levy of service tax on MF distributors has also played a role in getting them together.
Rajiv Bajaj, Vice-Chairman and Managing Director, Bajaj Capital, said the responsibility to implement trail-based commission has been forced on AMFI and it is doing a part-time job.
