Commission Structure

Mutual fund distributors receive commission on the investments mobilised by them under Regular Plan of MF schemes from the AMCs with whom they are empaneled. The trail commission is typically paid on monthly basis as per the commission structure decided by the respective AMCs as per their business policy.

As per SEBI MF Regulations, AMCs shall adopt full trail model of commission in all schemes, without payment of any upfront commission or upfronting of any trail commission, directly or indirectly, in cash or kind, through sponsorships, or any other route.

In other words, incentives in any other form to the distributor which is not in the form of trail commission is not permitted as per above regulatory guideline. In short, MFDs are paid only trail commission and, such trail commission can be paid only in monetary terms.