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January 1, 2008

New Year gift for Investor from SEBI

Sebi scraps mutual fund entry load with effect from January 4.  The Securities and Exchange Board of India (Sebi) on Monday barred mutual fund houses from charging entry load from investors, who buy schemes directly from funds and not through a distributor, agent or broker.  The new rule is effective from January 4, according to a Sebi circular on Monday.  At present, the industry average for entry load is 2.25 per cent of the initial investment. Asset management companies (AMCs) selling schemes either through internet, mutual fund offices or their collection centres, can benefit from the new rules.  "Keeping in mind the interests of investors and to facilitate the growth in mutual fund industry, with effect from January 4, 2008, investors making applications for investments in mutual fund schemes directly without routing them through any distributor, agent or broker, that is, through the internet, submitted to AMC, collection centre or investor service centre would not be subject to entry load," said the circular.

The regulator said the waiver will also apply 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.

(Business Standard)

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