Ch.6 · Distributor Commission Structure · medium
Since SEBI banned upfront commissions in September 2018, how are distributors compensated?
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EXPLANATION
Since SEBI's September 2018 circular banning upfront commissions, all distributor compensation must be in the form of trail commission only. Trail is paid monthly from the scheme's TER, as a percentage of the investor's AUM. This eliminates the incentive to churn portfolios for upfront payments.
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