Mutual Funds go against Amfi diktat, dole out higher fees to distributors

In a bid to shore up assets in a rising market, mutual funds resorted to doling out high upfront commissions to distributors in the past financial year, violating the best practices guidelines put out by industry body Association of Mutual Funds in India (Amfi). 

Commissions paid for selling open-ended equity schemes went as high as 200 basis points (bps) while that for closed-ended ones stood at 5-6 per cent, said two people familiar with the matter. 

"Virtually nobody is following the best practices guidelines and larger distributors with bargaining clout are pocketing higher commissions," said a senior industry official, on