Here is a cut paste from the SEBI circular of what happened at their meet today:
In order to help Mutual Funds penetrate into retail segment in smaller towns, the distributor would be allowed to
charge Rs. 100 as transaction charge per subscription.
No charge can be made for investments below Rs. 10,000.
An additional amount of Rs. 50 can be charged to first time Mutual Fund investor.
However, there would be no transaction charge on (a) transactions other than purchases/ subscriptions relating to new inflows, and (b) direct transactions with the Mutual Fund.
For SIPs, the transaction charges can be recovered in 3 or 4 instalments. The transaction charges are in addition to the existing eligible commissions permissible to the distributors.
The training cost of explaining this provision to distributors will be a few crores. Definition of subscription, new fund investor, 3-4 instalments, etc. I am unable to understand, so I guess many people will not be.
First time in a particular fund or a particular scheme or in the industry?
Who will collect? will the IFA have to issue a receipt?
Will the fund house collect and pay to the IFA?
Will more intelligent and evolved people like Ramesh Bhatt of IFA Galaxy and Srikanth of Fundsindia.com take the trouble of explaining it to me?
I just have to write – Ramesh, Srikant, Karvy and Cams have to implement.
God bless all of us.
Thank you SEBI, I got a post.
PS: Why is the brokerage paid not being shown as a separate expense instead of adding to the NAV? I have been asking this for 10 years…still unable to understand please.
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