How-to trail commission distributor

How to handle mutual fund trail commission specifically

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MF trail commission is the perpetuity-like income stream for ARN holders. The trail-only model rewards long-term retention; loses if investor switches to direct.

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Step-by-step procedure

See the procedure infobox above for the six steps.

Category-wise indicative trail rates

CategoryTrail per annum
Equity (large-cap, flexi, ELSS)0.50-1.00%
Hybrid0.40-0.80%
Debt (short, corporate bond)0.20-0.60%
Liquid0.05-0.20%
FoF / international0.30-0.70%

Actual rates negotiated per AMC’s distributor agreement.

See also

External references

References

  1. SEBI (Mutual Funds) Regulations, 1996.
  2. SEBI Upfront Commission Ban Circular, 2018-2019.
  3. AMFI Best Practice Guidelines.

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The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

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