In June 2009, The Securities and Exchange Board of India (SEBI) had abolished entry load for investing in mutual funds. This SEBI guideline, empowering investors through transparency in payment of commission and load structure came into force on August 1, 2009.
Personal Money had earlier analyzed the impact of this move on Mutual Fund Investors, Agents & Distributors and Asset Management Companies (AMC)
The ban on entry load on mutual funds (MFs) has struck its first blow to the asset management industry, with the government-run India Post stopping the distribution of MF schemes through its designated post offices.
India Post — a ‘national distributor’ in the real sense, thanks to its expansive distribution channel covering over 210 post offices — has informed mutual funds (with which India Post has exclusive tie-ups) that it will not sell schemes until there is clarity on distribution commission. Read the full story on The Economic Times.