The Association of Mutual Funds in India (AMFI) mandates that all
mutual fund distributors (MFDs) adhere to a transparent and ethical
framework when dealing with investors. This policy ensures that
distributors disclose relevant brokerage details to investors and
operate in a manner that prioritizes investor interests.
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Mutual fund distributors must act in the best interests of
investors by maintaining transparency in their dealings. They
should avoid conflicts of interest and ensure that investors
receive unbiased advice regarding mutual fund investments.
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Distributors are required to disclose all commissions received
from Asset Management Companies (AMCs), including upfront
commissions trail commissions and any other incentives received
from AMCs. This disclosure ensures that investors are fully
informed about any compensation structures that could influence
investment recommendations.
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As per AMFI guidelines, mutual fund distributors are strictly
prohibited from offering rebates or passing back any commission to
investors, providing gifts, incentives, or any other forms of
inducement to attract investors. Such practices are deemed
unethical and are strictly regulated to maintain investor trust
and market integrity.
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Distributors must adhere to ethical business practices and avoid
encouraging excessive transactions to earn higher commissions,
splitting applications to gain additional transaction fees,
providing misleading or false information about mutual fund
products. Strict compliance with these guidelines helps safeguard
investors and ensures fair market practices.
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Mutual fund distributors must comply with all applicable SEBI and
AMFI circulars, notifications, and guidelines. Regular updates and
adherence to evolving regulatory frameworks are essential to
ensure compliance and maintain investor confidence.
This brokerage disclosure policy is designed to uphold the highest
standards of transparency and ethical conduct in mutual fund
distribution. Investors are encouraged to review all disclosed
commissions and seek clarity from their distributors regarding any
potential conflicts of interest.