The Association of Mutual Funds of India will shortly thrash out with the Securities and Exchange Board of India the issue of disclosure of distributors' commission in accounts statement.

C V R Rajendran, CEO of AMFI, said at an Indian Chamber of Commerce event here on Saturday that soon SEBI and AMFI would sort out the problem. Mutual fund industry has a strong reservation over such disclosure.

SEBI has recommended mutual funds to disclose the commission of distributors in accounts statement. Instead of disclosing the commission on their accounts statement, mutual funds may like to disclose the total expenses charged by their schemes.

Many distributors fear that such a disclosure will be regressive as it may prompt demand for pass-back of a portion of the commission from investors.

The Sumit Bose Committee had proposed to introduce this as a part of a set of disclosures for more investor protection from misselling and to improve transparency. Distributors are expected to disclose the percentage of trail commission in a detailed form at the point of sale.

The idea behind such disclosures was that an average customer can understand what the product costs, what the benefits are and take an informed decision.

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