AMFI has also announced a small registration fee of Rs3,000 for a newly created cadre of distributors, which includes retired government employees, teachers and bankers
New Delhi: Taking forward the steps initiated by the government and the market regulator Securities and Exchange Board of India (SEBI) to revive mutual fund (MF) investments, the fund houses have slashed the distributor registration fees by up to 80% to boost their sales, reports PTI.
The revised registration fees, which mutual fund industry body Association of Mutual Funds in India (AMFI) charges to the MF distributors, would be effective from 1st November.
Besides, AMFI has also announced a small registration fee of Rs3,000 for a newly created cadre of distributors, which includes retired government employees, teachers and bankers.
SEBI, which regulates mutual funds and other segments of capital markets, recently announced a slew of measures for benefit of mutual fund industry, including provision for a new distributor cadre and incentives for reaching out to smaller cities.
The government has also favoured steps for encouraging investors to put their money in mutual funds, equity and insurance products, rather than in idle assets like gold.
As per the regulations, all mutual fund distributors are required to get registered with AMFI and get an ARN (AMFI Registration Number) for selling MF products.
"The revised fees will be effective from 1 November 2012 and shall be made applicable to those distributors who apply for fresh registration on or after 1 November 2012 and to the existing ARN holders whose ARNs are falling due for renewal on or after 1 November 2012," AMFI said in a circular.
As per the revised structure, the ARN fees for NBFCs have seen the biggest decline of 80% to Rs1 lakh (from Rs5 lakh earlier), while fees for proprietary firms have also been slashed considerably from Rs10,000 to Rs3,000.
The fees for individuals and senior citizens have been lowered from Rs5,000 to Rs3,000.
A similar fee of Rs3,000 would apply to the newly approved distributor class comprising of postal agents, retired teachers, retired government and semi-government officials, retired bank officers and other similar persons with a service of at least ten years in their organisations.
AMFI further said that the "fees for renewal of ARN will be 50% of the fees payable for fresh registration under respective category of distributors".
ARN is allotted to individual agents, brokers, and other intermediaries engaged in selling mutual funds after they pass the AMFI/NISM (National Institute of Securities Market) certification test. Besides, AMFI also allots ARNs to corporates engaged in business of selling mutual funds.
The ARNs allotted to mutual fund distributors are valid for a period of three years and need to be renewed thereafter.