The capital market regulator, Securities and Exchange Board of India (Sebi), wants the mutual fund (MF) investor to know more about what happens to her investments. It wants her to get to know her distributor and fund managers better, and also how they behave with her money.
On 17 March, Sebi issued a circular that increased the level of transparency in MFs by a few notches. Among many changes, it has mandated fund houses to disclose the amount of commission that distributors earn on each scheme that the investor invests in, and it also directed mutual funds to disclose the salaries of top officials on their websites.
So, with all of this information made available to the MF investor, the question now is: how does one make sense out of it? Mint Money tells you what you should do.
Distributor commissions
Beginning October 2016, you will now come to know the commissions that your distributor earns. This information will be available as a part of the half-yearly common account statement, CAS, (a statement of your MF holdings across all the fund houses that you have invested in). The Sebi circular mentions that your distributor’s commission must be given in absolute terms (in rupees) and for each MF scheme that you may have invested in. So let us say you have invested in three schemes of the same fund house and all of them through the same distributor. Even in such a scenario, you will now get to know how much commission your distributor has earned (during the half-year period) on each of those schemes.
