Come August 24 and the road for Asset Management Companies (AMCs) that do not follow the rules on charging uniform exit load from investors, may not be as smooth as earlier.
Market regulator Securities and Exchange Board of India (SEBI), virtually charging the industry with practicing size bias, has said that no distinction should be made between unit holders. SEBI took this step as a result of funds charging nothing or very negligible amounts as exit loads from the largest investors, while they imposed virtually penal rates on small investors.
This move, the order said, would bring parity among different unit holders.
The market regulator has reiterated its statement to all the mutual fund houses and has made it clear yet again that all fund houses have to comply with the circular on or before August 24. The parity however, would be made applicable at the portfolio level only.
The statement further added that if there are any impositions or enhancements made in the load, it should be done on prospective investments only and all the mutual fund houses should follow it.