SEBI Woos MF Distributors With Incentives
There will be a slew of changes coming in
effect from the beginning of the next calendar year. The Securities
& Exchange Board of India (SEBI) is anticipating that the moves
would encourage the mutual fund industry and categorically, brokers. The
regulator claims that the distributors, with new rules in place, will
start looking beyond the commission.
It was a big jolt for the mutual fund industry and especially, the distributors after SEBI banned the entry load in 2009. SEBI is back in action to woo the distributors.
The new SEBI guidelines not only brings the broker back into the game, but also aims to force them to evolve from being mere product pushers to financial advisors. The new guidelines are supposed to give incentives to distributors to sell mutual funds outside the top 15 cities. Mutual funds will be able to charge a fee (known as an expense ratio) of up to 0.3 percentage point more for expenses on the investment flows from small cities and towns. The extra cash can go to distributors who help canvas investors from such uncharted territories.
The new guidelines allow funds with a corpus of less than Rs. 100 crore to charge 3 percent of the corpus for expenses, up from the earlier 2.5 percent. However, this arrangement is not fool proof. Some distributors might give the native addresses of some investors to get that extra commission, even when the investor lives in one of those big 15 cities. But, fact is, there is a lot of business for the distributor in this model. For the first time, distributors are looking at a model that will be entirely concentrated on trail-based commission and advice to clients in order to retain them as a long-term proposition.
To encourage mutual funds to directly approach investors, SEBI has created two plans: A direct plan that will have a higher net asset value, and a distributor plan that will have a net asset value lower by about 0.5 percentage point to accommodate commissions. This means mutual funds will be selling their funds through brokers, while also competing with them for investors.
MF UPDATE
UTI revises exit load under UTI - Credit Opportunities Fund
UTI MF has announced to revise the exit load structure under UTI – Credit Opportunities Fund. Accordingly, an exit load of 1.25% will be charged if units are redeemed or switched out within 365 days and 0.75% will be charged if units are redeemed or switched out within 366 days to 548 days from the date of allotment. The revised exit load structure will be effective from 26 November 2012.
IDFC proclaimed dividend under its schemes
IDFC MF has announced dividend for IDFC Arbitrage Plus Fund-Plan A & Plan B, IDFC Asset allocation Fund of Fund-Conservative Plan, IDFC Asset allocation Fund of Fund-Aggressive Plan, IDFC Asset allocation Fund of Fund-Moderate Plan, IDFC Super Saver Income Fund – Medium Term Plan A under its dividend option. The quantum of dividend for distribution will be Rs. 0.50, Rs 0.03, Rs 0.07, Rs 0.06, Rs 0.1369, per unit respectively. The record date for dividend distribution is 29 November 2012.
DSP BlackRock Announces Change In Fund Management Responsibilities
DSP BlackRock MF has announced change in fund management responsibilities for certain schemes, with effect from 26 November 2012. Accordingly, DSP BlackRock Strategic Bond Fund will be managed by Dhawal Dalal and DSP BlackRock MIP Fund & DSP BlckRock Balanced Fund will be jointly managed by Apoorva Shah & Dhawal Dalal.
ICICI announced dividend under its schemes
ICICI MF has announced dividend for ICICI Prudential Top 200 Fund under its dividend option. The quantum of dividend for distribution will be Rs. 1.70 per unit on the face value of Rs. 10 per unit. The record date for dividend distribution is 30th November 2012.
Tata announced dividend under its schemes
TATA MF has announced dividend for Tata Tax Saving Fund. The quantum of dividend for distribution will be Rs 1.50 per unit on the face value of Rs. 10 per unit. The record date for dividend distribution is 3 December 2012.
It was a big jolt for the mutual fund industry and especially, the distributors after SEBI banned the entry load in 2009. SEBI is back in action to woo the distributors.
The new SEBI guidelines not only brings the broker back into the game, but also aims to force them to evolve from being mere product pushers to financial advisors. The new guidelines are supposed to give incentives to distributors to sell mutual funds outside the top 15 cities. Mutual funds will be able to charge a fee (known as an expense ratio) of up to 0.3 percentage point more for expenses on the investment flows from small cities and towns. The extra cash can go to distributors who help canvas investors from such uncharted territories.
The new guidelines allow funds with a corpus of less than Rs. 100 crore to charge 3 percent of the corpus for expenses, up from the earlier 2.5 percent. However, this arrangement is not fool proof. Some distributors might give the native addresses of some investors to get that extra commission, even when the investor lives in one of those big 15 cities. But, fact is, there is a lot of business for the distributor in this model. For the first time, distributors are looking at a model that will be entirely concentrated on trail-based commission and advice to clients in order to retain them as a long-term proposition.
To encourage mutual funds to directly approach investors, SEBI has created two plans: A direct plan that will have a higher net asset value, and a distributor plan that will have a net asset value lower by about 0.5 percentage point to accommodate commissions. This means mutual funds will be selling their funds through brokers, while also competing with them for investors.
MF UPDATE
UTI revises exit load under UTI - Credit Opportunities Fund
UTI MF has announced to revise the exit load structure under UTI – Credit Opportunities Fund. Accordingly, an exit load of 1.25% will be charged if units are redeemed or switched out within 365 days and 0.75% will be charged if units are redeemed or switched out within 366 days to 548 days from the date of allotment. The revised exit load structure will be effective from 26 November 2012.
IDFC proclaimed dividend under its schemes
IDFC MF has announced dividend for IDFC Arbitrage Plus Fund-Plan A & Plan B, IDFC Asset allocation Fund of Fund-Conservative Plan, IDFC Asset allocation Fund of Fund-Aggressive Plan, IDFC Asset allocation Fund of Fund-Moderate Plan, IDFC Super Saver Income Fund – Medium Term Plan A under its dividend option. The quantum of dividend for distribution will be Rs. 0.50, Rs 0.03, Rs 0.07, Rs 0.06, Rs 0.1369, per unit respectively. The record date for dividend distribution is 29 November 2012.
DSP BlackRock Announces Change In Fund Management Responsibilities
DSP BlackRock MF has announced change in fund management responsibilities for certain schemes, with effect from 26 November 2012. Accordingly, DSP BlackRock Strategic Bond Fund will be managed by Dhawal Dalal and DSP BlackRock MIP Fund & DSP BlckRock Balanced Fund will be jointly managed by Apoorva Shah & Dhawal Dalal.
ICICI announced dividend under its schemes
ICICI MF has announced dividend for ICICI Prudential Top 200 Fund under its dividend option. The quantum of dividend for distribution will be Rs. 1.70 per unit on the face value of Rs. 10 per unit. The record date for dividend distribution is 30th November 2012.
Tata announced dividend under its schemes
TATA MF has announced dividend for Tata Tax Saving Fund. The quantum of dividend for distribution will be Rs 1.50 per unit on the face value of Rs. 10 per unit. The record date for dividend distribution is 3 December 2012.
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