Securities and Exchange Board of India''s (SEBI''s) proposal to waive entry load
for mutual fund customers has come under fire from leading asset management companies
(AMCs) in the country. Last month, the regulator had proposed that mutual fund
investors who approach the AMCs directly, rather than through distributors, should
not be charged the entry load of 2.25 per cent.
meeting of the members of the Association of Mutual Funds of India (AMFI) on Wednesday
5 April saw much grumbling about Sebi''s proposal, but AMFI apparently stopped
short of issuing an official condemnation of the concept.
fund houses usually pass on the entire entry load to distributors, who play a
pivotal role in bringing investors to mutual fund (MF) schemes. SEBI feels entry
loads prevents investors from getting the maximum benefits on their investments.
say their distributors spend a lot of money in setting up offices in small towns,
which MFs themselves cannot afford to do, and deserve the income from entry loads.