MF agents ask Sebi to scrap commission disclosure rule

For greater transparency in dealings of mutual funds, Sebi had asked MF houses to disclose to investors the commissions paid to their distributors, including payouts in the form of gifts, trips and sponsorships from October in the consolidated account statement (CAS) sent to investors. 

Several mutual funds’ distributor associations including Financial Intermediaries Association of India (FIAI) said the circular on “commission disclosure is more likely to be counter productive on all counts and must be withdrawn.” They said such disclosures are selective and will provide information which is incomplete and not relevant and will mislead the investor to make wrong choices. “This will be harmful to the investor, detrimental to the growth of the industry,” distributors said.