Ch.4 · SEBI Mutual Fund Regulations · medium
What is 'churning' in mutual fund distribution and why is it prohibited?
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EXPLANATION
Churning refers to a distributor recommending frequent switching of a client's investments between schemes primarily to earn higher commissions (entry loads previously, now trail resets). It is prohibited under the AMFI Code of Conduct as it is against the investor's interest and constitutes mis-selling.
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