SEBI has taken another step forward in removing the transaction charges paid to mutual fund distributors by AMCs, effective immediately. Previously, distributors received transaction charges for investments of ₹10,000 or more brought in by investors. As a result of public and industry feedback in the years 2023 and 2025, implementing transaction charges to fund distributors was unnecessary since the distributors will get paid through commission or fees.SEBI has removed transaction charges from the master circular on mutual funds which was dated 27 June, 2024. This will make the remuneration structure in the mutual funds more streamlined. While the step taken will lower expenses for the investors, the distributors will have to shift to a commission structure that favors long-term engagement and requires more advisory work.Key points:Transaction charges from AMCs to mutual fund distributors are removed effective immediately.Charge was previously applied for subscriptions of ₹10,000 and above.Distributors will no longer receive transaction charges from AMCs and will instead be paid directly.SEBI aims for more clarity and simplification on the payments for the distributors.The decision follows public and industry consultations from 2023 and 2025.
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