The Securities and Exchange Board of India (Sebi) has proposed measures to curb mis-selling in Alternate Investment Funds (AIFs) including mandatory offering of direct plans and introduction of trail model for distribution commission.
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The regulator has said that in certain cases the quantum of upfront commissions for AIF distribution fees has gone up to around 4-5 per cent of committed amount.
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“Such high upfront commissions, particularly in sharp contrast to the trail commissions for other products, increase the chances of mis-selling of AIF schemes,” noted Sebi.
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In a discussion paper issued on Friday, Sebi has proposed on adopting a trial