"It has now been decided that no entry load shall be charged for direct applications received by the AMCs i.e. applications received through Internet, submitted to AMCs or collection centre/ investor service centres that are not routed through any distributor/agent/broker," Securities and Exchange Board of India said in a circular.
The exemption would apply for investments in existing schemes with affect from January 4, 2008 and in new schemes to be launched thereafter.
The Sebi circular further said, the entry fee exemption would also apply to additional purchases made directly by the investors under the same folio or for switching from one scheme to the other.
These exemptions, the SEBI said, were intended "to protect the interests of investors' securities and to promote the development of, and to regulate the securities market".
"This is good and positive move and will help the mutual fund industry," said managing director of the Delhi-based Taurus Asset Management Company R K Gupta while commenting on the SEBI notification.
Gupta further said that this decision was overdue and "for the past five years we have been pressing for this exemption".
Sebi's move, however, would have adverse implications for the intermediaries who have been involved with the mutual fund industry.
