Entry Load on WebNotes

Entry load in mutual funds (historical)

Mon, 18 May 2026 00:00:00 +0000

Entry load was an upfront charge on mutual fund purchases prevalent in Indian mutual funds until August 2009. The entry load was deducted from the investor’s subscription amount before allocating units, typically at 2-2.5% for equity schemes.

Pre-2009 framework

Until August 2009:

Entry load: 2-2.25% deducted at purchase.
Used for: Distributor commissions, AMC marketing, fund-house operational costs.
Investor impact: Upfront cost reducing initial unit allocation.

SEBI abolition (August 2009)

SEBI abolished entry loads on mutual fund purchases through a circular effective 1 August 2009. Key changes:

Entry load in mutual funds, historical note

Tue, 12 May 2026 00:00:00 +0000

Entry load (also called front-end load or sales load) was a one-time charge deducted from an investor’s purchase amount before mutual fund units were allotted, effectively reducing the number of units received for a given investment. The charge was expressed as a percentage of the investment amount and was primarily used to compensate mutual fund distributors for their sales effort. SEBI abolished entry loads on all mutual fund schemes in India with effect from 1 August 2009, making it a purely historical instrument.

Exit load cap rule, Indian mutual funds

Tue, 12 May 2026 00:00:00 +0000

The exit load cap rule in Indian mutual fund regulation refers to the suite of provisions under Regulation 52 of the SEBI (Mutual Funds) Regulations, 1996 that govern the maximum exit load an AMC may charge and the mandatory credit of such loads to the scheme rather than to AMC revenues. The most significant milestones in the evolution of this framework are: the abolition of entry loads by SEBI circular dated 30 June 2009; the mandatory credit of exit loads above 1% to the scheme (from 1 October 2012); and the effective cap on exit loads at 1% for all redemptions after one year for equity schemes. These rules are enforced by the SEBI Investment Management Department .