 "AMCs may allow trail commission to mutual fund distributors: Amfi")
Mutual fund distributors will now be able to receive trail commission from asset management companies (AMCs) on assets switched by an investor from one distributor to another.
The Association of Mutual Funds in India (Amfi) on Tuesday said that AMCs may allow trail commission to distributors on such transfers after a cooling-off period of six months.
A distributor is an agent between the AMC and investor to facilitate buying or selling of units in a mutual fund.
“The payment of commission to the new (transferee) distributor shall be based on the lower of the commission rate of the transferor and the transferee distributor,” Amfi said in communication to AMCs.
The mutual fund body added that other than trail commission, no other payments of any nature (including incentives) will be made on account of change in the distributor.
Till now, no trail commission was paid for the transferred assets if the request for change in distributor was raised by the investor.
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