SEBI Big Announcement..! Transaction charges for mutual fund distributors are now over, rules will be implemented immediately

Market regulator Sebi has said that distributors, who act as agents of mutual fund companies, should be paid directly as commission or fee and not through transaction charges.

SEBI New Rules: The Securities and Exchange Board of India (SEBI) has completely abolished the transaction charges given to mutual fund distributors. This decision has been implemented with immediate effect, so that now asset management companies (AMCs) will not make such additional payments. According to PTI news, this decision has been taken after public consultation held in May 2023 and discussions with the industry held in June 2025.

What arrangement did SEBI give

According to market regulator SEBI, under the system in force till now, distributors were given transaction charges for bringing investments of ₹ 10,000 or more. This rule was included in the Master Circular of 27 June 2024. However, after the new review, SEBI found that distributors, who play the role of agents of the AMC, should be paid directly in the form of commission or fee, and not through transaction charges. On this basis, the relevant provisions of the Master Circular have now been completely removed.

Transparency will be promoted in the industry

SEBI believes that this change will promote transparency in the mutual fund industry and simplify the payment system of distributors. This circular has been issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 52(4A) of the SEBI (Mutual Funds) Regulations, 1996 with the objective of protecting the interests of investors, promoting the development of securities market and regulating it.

Who are mutual fund distributors?

Mutual fund distributors are financial intermediaries or private individuals who help investors to invest in and maintain mutual funds. They are often also called mutual fund agents. These distributors play an important role in the sale and distribution of mutual fund products to individual investors. According to Bajaj Finance, these agents are registered and regulated by the Securities and Exchange Board of India (SEBI) and the Association of Mutual Funds in India i.e. AMFI.

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