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SEBI's New Year Gift to Investors

Under new rules announced a short while back, investors who deal directly with AMCs will not have to pay any load on their fund investments

“We have tried to make 2008 happier for mutual fund investors,” is what SEBI chairman M Damodaran had to say on the last day of 2007. Beginning January 4, 2008, mutual funds investors will not have to pay entry load if they buy funds directly from mutual fund companies. Such purchases can be made either through the internet, or through applications submitted directly to the AMCs or their investor service centres.

The load waiver would also be applicable to additional purchases done directly by the investor under the same folio and switch-ins to a scheme from other schemes.

A majority of mutual funds charge 2.25 per cent entry load for their equity schemes, which is used to pay for the commission of the agents and distributors and meet other marketing and distribution expenses.

These changes were first proposed by SEBI back in August 2007. Click here to read what Mr. Dhirendra Kumar wrote about the issue at that time.