The Securities & Exchange Board of India (Sebi) in its board meeting on Thursday decided to bring in more transparency in payment of commission to mutual fund distributors. A decision was taken that there will be no entry load for all the schemes, existing or new, of a mutual fund. Entry load is the commission that an investor has to pay while purchasing units of a mutual fund.
Sebi in its release said, ?The upfront commission to distributors shall be paid by the investor to the distributor directly. The distributors shall disclose the commission, trail or otherwise, received by them for different schemes/ mutual funds which they are distributing or advising the investors.?
Dhirendra Kumar, CEO of The Value Research, said, ?This is one of revolutionary step for the Indian MF industry. I think this will bring huge change in the industry and will bring in more transparency. On the other hand, distributors selling MF will face some difficult task and they have to chalk out some new plans to attract investors.?