No entry load for mutual funds from August 1

The Securities and Exchange Board of India (SEBI) has finally notified the variable load structure. CNBC-TV18 reports that mutual funds (MFs) will not have to pay variable load from August 1, 2009.

 

Also Read: Sebi scraps entry load for MFs, cuts fees of intermediaries

 

Here is a verbatim transcript of Vidhi Godiawala's comments on CNBC-TV18. Also watch the accompanying video.

 

The verdict is finally out! From August 1, there will be no entry load on any of the MF products. The investors will have to pay an upfront commission to the distributors and distributors will have to disclose the commission that they pay whether it is the trail commission they pay to the fund house as well and the investor will take the decision then.

 

Maximum of 1% of the redemption proceeds can be paid as redemption to the distributors. Also, the variable load will be applicable for all the schemes as well as systematic investment plans (SIPs). This will be for the new schemes, not for the existing ones. However, if you were to do a transfer from one SIP to another SIP, then the entry load will not be applicable there as well.