**Summary:**
This circular, reference number SEBI/HO/IMD/DIMD/PoD1/CIR/2025/115, issued by the Securities and Exchange Board of India (SEBI) on August 08, 2025, addresses transaction charges paid to Mutual Fund Distributors. The circular, directed to all Mutual Funds, Asset Management Companies (AMCs), Trustee Companies of Mutual Funds, the Association of Mutual Funds in India (AMFI), and Registrar to an Issue and Share Transfer Agents (RTAs), eliminates the allowance for AMCs to pay transaction charges to distributors for minimum subscription amounts of INR 10,000. This decision follows a public consultation in May 2023 and an industry consultation in June 2025. Consequently, paragraphs 10.4.1.b and 10.5 of the SEBI Master Circular for Mutual Funds dated June 27, 2024, are deleted, effective immediately. The circular is issued under the authority of Section 11I of the Securities and Exchange Board of India Act, 1992, and regulation 524A of the SEBI Mutual Funds Regulations 1996. The full circular is available on the SEBI website (www.sebi.gov.in) under the "Legal Circulars" section. For further information, contact Peter Mardi, Deputy General Manager, Investment Management Department, at 912226449233 or peterm@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body for the securities market in India, also known as SEBI
Mutual Funds: Refers to collective investment schemes
Asset Management Companies: Companies that manage investment funds, also known as AMCs
Association of Mutual Funds in India: Industry association for mutual funds in India, also known as AMFI
Registrar to an Issue and Share Transfer Agents: Entities responsible for managing shareholder records and processing share transfers, also known as RTAs
SEBI Master Circular for Mutual Funds dated June 27, 2024: A comprehensive document issued by SEBI providing guidelines and regulations for Mutual Funds
Securities and Exchange Board of India Act, 1992: The law that established SEBI and defines its powers and functions
SEBI Mutual Funds Regulations 1996: Regulations governing the operation and management of mutual funds in India
CIRCULAR
SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/115 August 08, 2025
To,
All Mutual Funds
All Asset Management Companies (AMCs)
All Trustee Companies of Mutual Funds
Association of Mutual Funds in India (AMFI)
Registrar to an Issue and Share Transfer Agents (RTAs)
Madam/ Sir,
Subject: Transaction charges paid to Mutual Fund Distributors
1. Paragraph 10.5 read with paragraph 10.4.1.b of SEBI Master Circular for Mutual
Funds dated June 27, 2024 (Master Circular) allows AMCs to pay to the distributor
transaction charges, subject to a minimum subscription amount of INR 10,000/-
brought in by such distributors.
2. The public consultation on the captioned subject matter was carried out in May
2023 followed by an industry consultation in June 2025.
3. Based on the feedback received from the industry and considering that distributors
as an agents of AMCs are entitled to be remunerated by the AMCs, the charges
or commission, as prescribed under the paragraph 10.4.1.b and paragraph 10.5
of Master Circular, shall be done away with.
4. Accordingly, paragraphs 10.4.1.b and 10.5 of Master Circular stands deleted.
5. The circular shall come into force with immediate effect.
6. This circular is issued in exercise of the powers conferred by Section 11(1) of the
Securities and Exchange Board of India Act, 1992 read regulation 52(4A) of the
SEBI (Mutual Funds) Regulations 1996 to protect the interest of investors in
Page 1 of 2securities and to promote the development of, and to regulate the securities
market.
7. This circular is available at www.sebi.gov.in under the link “Legal ->Circulars”.
Yours faithfully,
Peter Mardi
Deputy General Manager
Investment Management Department
+91-22-26449233
peterm@sebi.gov.in
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