The Hindu : Business : No entry load for direct investment in MF schemes

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Tuesday, Jan 01, 2008
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No entry load for direct investment in MF schemes

Special Correspondent

SEBI decision to take effect from January 4

MUMBAI: The Securities and Exchange Board of India (SEBI) on Monday decided to waive the entry load for investors making applications for investments in existing mutual fund schemes directly with effect from January 4, 2008 and in new schemes to be launched thereafter.

“Keeping in mind the interests of investors and to facilitate the growth in the mutual fund industry, with effect from January 4, 2008, investors making applications for investments in mutual fund schemes directly — without routing through any distributor, agent or broker — submitted to an asset management company or collection centre or investor service centre will not be subject to entry load,” SEBI said in a release.

This waiver will also apply to additional purchases done directly by the investor under the same folio and switch-in to a scheme from other schemes if such a transaction is done directly by the investor.

The growth of the mutual fund industry in the past years and the technology available for investments have enabled investors to take informed decisions and to invest in mutual funds through internet and other modes without availing themselves of the services of distributors or agents or brokers, it added. The market regulator also said that there was an overwhelming response in favour of the proposal by SEBI on waiver of entry load for investors who do not route their mutual fund applications through a broker or a distributor.

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