Ch.2 · Advantages and Limitations of Mutual Funds · medium
What was SEBI's rationale for banning entry loads on mutual funds in 2009?
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EXPLANATION
SEBI banned entry loads in August 2009 because they created a conflict of interest — distributors were incentivised to recommend schemes with higher entry loads rather than the most suitable scheme for the investor. Banning entry loads eliminated this incentive, aligning distributor recommendations more closely with investor interest.
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