Ch.6 · ARN and EUIN Rules · hard
What is the significance of the 'redemption ratio' for monitoring distributor practices?
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EXPLANATION
AMCs monitor the redemption ratio of each distributor — a very high ratio (investors redeeming shortly after purchase) may indicate churning, mis-selling, or inappropriate products being sold. SEBI and AMFI use this metric as a flag for distributor conduct review and potential Code of Conduct violations.
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