Load on Bonus Units and units allotted on Reinvestment of Dividend
Summary
The circular prohibits Asset Management Companies from charging entry or exit loads on bonus units and units allotted upon dividend reinvestment. Mutual Funds are advised to include specific disclosures regarding this prohibition in their draft offer documents filed with SEBI. These provisions apply to redemptions by existing unit holders effective from April 1, 2008.
Text
AMCs shall not charge entry as well as exit load on Bonus units and of units allotted on reinvestment of Dividend.
AMCs are hereby advised to make necessary disclosures in this regard in the draft offer documents filed with SEBI.
The provisions of this circular shall also be applicable to redemption by existing unit holders with effect from April 1, 2008. Necessary addendum may be issued by the AMCs in this regard.
This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996.
Source: SecMarx — Load on Bonus Units and units allotted on Reinvestment of Dividend. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.