No Entry load for any Mutual fund Scheme ; Mutual funds Transactions made possible through stock Exchange Platforms
SEBI has stipulated that no entry load shall be there for any mutual fund scheme and the upfront commission to distributors will be paid by the investor directly based on the assessment of various factors including the service rendered by the distributor. Of the exit load charged to the investor, a maximum of one percent of the redemption proceeds shall be maintained in a separate account which can be used by the Asset Management Company to pay commissions to the distributor and to take care of other marketing and selling expenses. Any balance needs to be credited to the scheme immediately. These measures are meant to protect the interests of the investor.
SEBI has taken various steps to empower the investors in mutual funds by way of more transparency so that investors can take informed decisions. The measures include scrapping entry load on mutual fund schemes, prescribing same exit load for all classes of unit holders and enabling mutual fund transactions through stock exchange platforms.
The expenses that can be charged to mutual fund schemes including commission to agents is governed by the SEBI (Mutual Funds) Regulations, 1996.
This information was given by the Minister of State for Finance, Shri Namo Narain Meena in a written reply to an Unstarred Question raised in Lok Sabha today.