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The Association of Mutual Funds in India (AMFI) has reduced registration charges of distributors’ up to 80 per cent.
According to industry officials, the reduction in fees is not uniform across all categories of distributors. The slash is highest in case of Non-Banking Financial Institutions, regional rural banks (RRBs), district central co-operative banks among others. At 80 per cent, this category benefits the most with the fees being brought down to Rs 1 lakh from Rs 5 lakh.
“We felt the need to redraw the categories and try and enrol more people. SEBI had announced some developmental measures and increase retail participation. More distributors would mean more activity which would mean more participation by investors,” said V Ramesh, Deputy Chief, AMFI.
This is in keeping with SEBI’s aim to get more retail participation from beyond the tier-I and tier-II cities. Reducing the fees for entities like RRBs, co-operative banks and others would help in tapping more participants from the smaller towns and cities.
“The move is a step in the right direction as this will help in the increase in the number of participants in the industry. Asset Management Companies will now get into the training mode. In a challenging market like this, when business is difficult, reducing the registration and renewal fess will to some extent help the distributors,” said Vivek Miranda, Head of Sales, IIFL Mutual Fund.
SEBI, in it board meeting in August, created a new category of distributors which includes individuals like senior citizens, postal agents, retired government and semi-government officials who have been in service for at least 10 years in their respective organisations. The fee for this category has been fixed at Rs 3,000 per person. The fee for proprietary firms has been reduced to Rs 3000 from Rs 10,000.
For renewal of the ARN – AMFI Registration Number – distributors will have to pay about half the registration fees.
As of now, AMFI has about 47,000 registered distributors who have complied with the Know-Your-Distributor norms.
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