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SEBI removes entry load for open ended Mutual Funds (MFs)

Securities and Exchange Board of India (SEBI) has announced removal of entry load from open ended mutual funds (MFs) when investors buy schemes directly from fund houses.

Please click here to know how this move
impacts you – “No entry load for Mutual Funds (MFs) – What does it mean
for you?”

The Securities and Exchange Board of India (SEBI) announced today that
mutual funds (MFs) would not be allowed to charge an entry load when
investors buy schemes directly from them. This includes buying from their
websites, offices, investor service centers or collection centers.

This also applies to additional purchases made by an investor under an
existing folio, and in case of switch from an existing scheme into another.

Entry load may be charged when investors buy schemes through distributors,
agents or brokers.

This rule would be applicable from Jan 4th, 2008.

The industry norm is to charge an entry load of 2.25% for all investments.
The entry load is charged largely to meet marketing expenses. When an
investor buys directly from a fund house, there is no marketing expense,
and therefore, it is logical not to charge an entry load in this case.

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