Amfi ask MFs to disclose distributor commission for FY16

To enforce market regulator Sebi's directive, industry body Amfi has asked all mutual fund houses to disclose the commission paid to individual distributors in the last fiscal.

Also, Association of Mutual Funds in India (Amfi) has listed 497 distributors that qualify for disclosure of commission criteria laid by Sebi.

The distributor, who receives an aggregate commission of more than Rs 1 crore from all AMCs or gets a fee of Rs 50 lakh from single fund house or operates from more than 20 locations, is required to make such disclosure.

In a letter written to fund houses earlier this month, Amfi has asked AMCs to disclose total expenses and commission paid to distributors during the past fiscal, whether the distributor is an associate or group company of the sponsors of the mutual fund, net as well as gross inflows and average assets under management in a prescribed format.

The fund houses need to provide such information in respect of the distributors listed by Amfi, a move that will enable the industry body to display the consolidated figures on its website.

It has asked fund houses not to delete the name of any distributor from the list, or make any alterations in the prescribed format.

"If any distributor is not empanelled with your AMC, the commission figures against the said distributor may be indicated as zero (nil)," the letter noted.

It further said the list of distributors meeting the criteria of operating from more than 20 locations is under review and will be circulated separately.

For greater transparency in dealing with mutual funds, Securities and Exchange Board of India (Sebi), in 2011, directed asset management companies (AMCs) to disclose the total commission and expenses paid each year to distributors.

Further, Sebi in 2012 asked fund houses to make additional disclosures regarding distributor-wise gross inflows, net inflows, average assets under management and the ratio of AUM to gross inflows on their website among others.

Amfi has been asked to disclose the consolidated information in this regard on its website.

Accordingly, Amfi has listed out a total of 497 distributors that qualify for disclosure of commission for 2015-16 and has asked fund houses to disclose the same.

In March, Sebi had asked MF houses to disclose to investors the commissions paid to their distributors including payouts in the form of gifts, trips and sponsorships from October in the consolidated account statement (CAS) sent to investors.