Stock brokers seek to lower listing fees for selling mutual funds
Stock brokers, especially those that are listed companies, are asking for a reduction in the fees they have to pay to the Association of Mutual Funds in India (AMFI) for acting as fund distributors mutual funds.
The securities brokers’ umbrella body has written to the Securities and Exchange Board of India (SEBI) after their talks with the mutual fund industry body proved futile.
The Association of National Exchanges of Members of India (ANMI), which has around 900 stockbrokers among its members, has highlighted the fact that brokerage firms which come in the form of listed companies must also pay Rs 4 lakh as registration. fee and thereafter Rs 2 lakh as renewal fee every three years.
This is much higher than for limited liability companies which pay a registration fee of Rs 20,000 and a renewal fee of Rs 10,000 once every three years.
This is gaining importance as any entity wishing to sell mutual funds is required to obtain registration with AMFI by paying registration fees as well as renewal fees once every three years.
“For many brokers who are limited companies, the fee structure of Rs 4 Lakh for registration and Rs 2 Lakh for renewal is very exorbitant as it is 20 times higher than what is charged for the private company with limited liability,” said a statement from ANMI.
“…in order to gain the advantage of fees, many stockbrokers, which are limited liability companies, obtain registration in another entity to carry on the business of distribution due to which another entity is unnecessarily created and brokers are also required to carry out compliance activities of this entity,” he added.
ANMI’s latest move comes after repeated requests to the mutual fund industry body to lower registration fees by creating a separate category for ‘securities brokers’ and levying fees currently applicable to a limited liability company.
Incidentally, AMFI has already set up different categories including Banks, NBFCs, Corporations, Partnerships, Sole Proprietorships, Individuals, Micro-Finance Institutions, Trusts, and HUFs, among others. .
“Where discrepancies are reported, either our member must be explained the reasons for charging such high registration and renewal fees, or the discrepancy must be corrected,” ANMI’s letter to SEBI reads.
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