SEBI Introduces a Direct Plan allowing Investors to Invest in AIFs without Distribution Fee
- Blog|News|Company Law|
- < 1 minute
- By Taxmann
- |
- Last Updated on 12 April, 2023
Latest from Taxmann
Circular No. SEBI/HO/AFD/PoD/CIR/2023/054; dated: 10.04.2023
With a view to providing flexibility to investors for investing in AIFs, the SEBI has introduced a Direct Plan for schemes of AIFs. Such a direct plan shall not entail any distribution fee/placement fee.
The AIFs shall also ensure that investors who approach the AIF through a SEBI registered intermediary which is separately charging the investor any fee (such as advisory fee or portfolio management fee), are on-boarded via Direct Plan only.
Further, the SEBI has prescribed the Trail model for the distribution of commission in AIFs. They shall disclose the distribution/placement fee, to the investors at the time of on-boarding. Also, Cat III AIFs shall charge distribution fee/placement fee to investors only on an equal trail basis i.e., no upfront distribution fee/ placement fee shall be charged by Category III AIFs directly or indirectly to their investors.
Also, Category I AIFs and Category II AIFs may pay up to one-third of the total distribution fee/placement fee to the distributors on upfront basis, and the remaining distribution fee/placement fee shall be paid to the distributors on equal trail basis over the tenure of the fund. The AIFs shall be required to comply with the aforesaid provisions for investors on-boarded in AIFs/schemes of AIFs from May 01, 2023 onwards.
Click Here To Read The Full Circular
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
