As per the new SEBI circular, there shall be No Entry Load for all mutual fund schemes.
Applicability:
No entry load shall be applicable for:
a. Investments in mutual fund schemes (including additional purchases and switch-in to a scheme from other schemes) with effect from 1 August, 2009 ;
b. New mutual fund schemes launched on and after 1 August, 2009; and
c. Systematic Investment Plans (SIP) registered on or after 1 August, 2009.
What to do with running SIPs of clients?
It is clear that existing SIPs will continue to attract entry load, only those SIPs registered on or after 1 August 2009 will not attract any entry load.
Therefore, from investors’ point of view it is beneficial to re-register their SIPs to get away from the burden of entry load.
Actions required to avoid entry load: AMCs-wise
If AMCs is…
Reliance
Action-An investor just has to fill one form to re-register his/her SIP to avoid entry load. No benefit will be lost on SIP Insure (Please find attachment of form)
Franklin Templeton
Action-An investor just has to fill one form to re-register his/her SIP to avoid entry load.
DSP BR
Action-A consent letter from investor addressed to Ventura
All other AMCs#
Action-STOP existing SIP and RESTART it again
#Birla
Action-Century SIP should not be discontinued as this will lead to stoppage of insurance.
Note: AMCs are still contemplating on the procedure of applying No Entry Load on existing SIPs. Few more AMCs may come up with a Re-registration Form like Reliance and Franklin.
In case of further clarification do revert.
