SEBI announced new guidelines for the mutual fund industry. New investors will now have to shell out an additional Rs 150 for investment of Rs 10,000 and above in mutual funds, while the existing investors will be charged Rs 100 as transaction fees. SEBI had banned the entry load in MFs in Aug 2009.
Investors are already paying a commission in some cases, besides up to 2.5% of their investment towards expanses of fund management. SEBI also said that in order to help mutual funds penetrate into retail segment in smaller towns, the distributor would be allowed to charge Rs 100 as transaction charge per subscription. No charge can be made for investments below Rs 10,000.
The per transaction fee would be Rs. 100 for investments above Rs. 10,000 including Rs. 50 per new folio creation i.e. first time Mutual Fund investor. Transaction charge would be imposed on transactions other than purchases/subscriptions relating to new inflows, and direct transactions with the Mutual Fund. For SIPs, the transaction charges can be recovered in 3 or 4 months. However, it is still not clear whether the new SIP transactions of less than Rs. 10,000 would have one-time fee of Rs. 150 only recoverable on 3 or 4 months. Investors investing directly through AMCs shall not require paying any transaction fee or folio creation fee.