The commission will be paid from AMC’s books and only the first SIP(s) purchased by the new investor will be eligible for upfronting
The Sebi amended the conditions required for upfronting of trail commission based on SIP inflows at the mutual fund level
Markets regulator Sebi on Monday reviewed and modified the commission as well as disclosure norms for the mutual fund industry.
The move comes after the regulator in October 2018 asked the asset management companies (AMC) to adopt full trail model of commission in all schemes while allowing upfronting of trail commission only in case of inflows through systematic investment plans (SIPs).
For the purpose of charging additional TER from on inflows from retail investors from beyond top 30 cities (B-30 cities), Sebi said that inflows of up to ₹2 lakh per transaction by individual investors will be considered as inflows from retail investor.
AMCs are required to disclose the TER of all mutual fund schemes except infrastructure debt fund schemes on their website on daily basis.
Also, issuance of prior notice to the investors will not be required in case of any increase or decrease in TER due to change in asset under management (AUM) or other regulatory requirements.
Further, Sebi while making other modifications in disclosure norms said that schemes in the category of overnight fund, liquid fund, ultra short duration fund, low duration fund and money market fund will be exempted from making performance disclosure provided that the schemes are in existence for less than one year.
This story has been published from a wire agency feed without modifications to the text.
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