Direct Investment in Mutual Funds

#1
MF investors exempt from entry fee !!!!

Hello Friends ,

First and foremost, I would like to wish A Very Happy and Prosperous New Year to all of you. :)

Ok here is the gift from SEBI for MF investors... Exempt from Entry Fee for
Direct Investments to the AMCs with effect from Jan 04, 2008.

I am yet to begin investments in MF and hopefully, I shall do so from Jan 2008 onwards through SIP route. I have applied for ICICI Direct.com for online investment in MFs after hearing good reviews from members in this forum.

Now, is it advisable to change because of this 'gift' from SEBI or you would still advise to invest hassle free online through ICICI.. I mean would the saving be considerable enough due to this exemption ??? Please advise...

Regards

Jeet
 
#3
Re: MF investors exempt from entry fee !!!!

It says,

"It has now been decided that no entry load shall be charged for direct applications received by the AMCs i.e. applications received through Internet, submitted to AMCs or collection centre/ investor service centres that are not routed through any distributor/agent/broker," Securities and Exchange Board of India said in a circular.

What about the online mutual fund investments through sharekhan? Any idea?
 

rrs

New Member
#4
Re: MF investors exempt from entry fee !!!!

A gift to small investors, who can not afford to make choice of right/wrong stocks and right/wrong timing to enter/exit. Here is the text of the circular.
DEPUTY GENERAL MANAGER
INVESTMENT MANAGEMENT DEPARTMENT
SEBI/IMD/CIR No. 10/ 112153 /07
December 31, 2007

All Mutual Funds Registered with SEBI
Association of Mutual Funds in India (AMFI)

Dear Sirs,

Sub: Waiver of load for direct applications

At present irrespective of the mode of entry, investors are required to pay the entry load. Keeping in view the interest of the investors it has now been decided that no entry load shall be charged for direct applications received by the Asset Management Company (AMC) i.e. applications received through internet, submitted to AMC or collection centre/ Investor Service Centre that are not routed through any distributor/agent/broker.

Applicability
1. This circular shall be applicable for investments in existing schemes with effect from January 4, 2008 and in new schemes launched on and after the said date.
2. It shall also be applicable to additional purchases done directly by the investor under the same folio and switch-in to a scheme from other schemes if such a transaction is done directly by the investor.
3. AMCs shall follow the provisions pertaining to informing the unitholders upon a change in load structure as per clause 3(d) of standard observations.

This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Yours faithfully,

Ruchi Chojer
 
#5
Re: MF investors exempt from entry fee !!!!

Wayanadan,

Only direct applications received by AMCs are eligible for exemption from entry loads (fees). Any SIPs or lumpsum investments through Sharekhan, ICICIDirect, Citibank or any other distributor will continue to attract entry loads as the load/entry fee is used by the AMCs to pay commissions to the distributors.
 
#6
What about new SEBI guidelines & existing SIPs

As per new SEBI guidelines, direct investments will be load-free from 04-01-08. What if I have monthly SIP (ECS mandate) started thro' some agent 2 years ago? My acc statement bears agent's code on every leaf. Will this monthly investment (ECS from my bank-account) be treated as direct investment or agent mediated?
Should I stop this SIP & start afresh directly to avoid entry load?
 

shera

New Member
#8
Re: What about new SEBI guidelines & existing SIPs

The graceful act on the part of MFs would be to remove the entry load on the SIPs as the cheques / ECS mandate is already with them and there is no role of agent here. I doubt it will happen. As you said, the best thing to do is to discontinue and start afresh
 
#10
Re: What about new SEBI guidelines & existing SIPs

hey you dont need to start a fresh, just need to contact your AMC and let them know that you would like to continue the SIP through the same folio nos. that's it.
 

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